A mildly higher start ensures that the market remains positive, however during the early morning at least there was no sign of the relentless buying that has been driving values to contract highs on a daily basis. As the morning wore on the price started to drift further down, and July briefly moved beneath 26.00 to record a low at 25.96, before being pulled back up. Despite only seeing low volumes there was a healthy interest in viewing the activity for May’23 ahead of the expiry, with the May/Jul’23 spread chopping across the same range it has seen for many weeks, trading between 0.48 and 0.70 points. Jul’23 saw a spike back to 26.45 with the US day underway, however the rally stalled there, and it seemed that the longs were having a calmer day, content with the progress attained already this week. Volume was steady, aided by some healthy Jul/Oct’23 activity, however the flat price remained steadfastly within the range throughout the afternoon as Jul’23 increasingly gravitated to hold near to unchanged levels, though 2024 and 2025 values were buoyant with solid double-digit gains in place. This meant that Jul’23 headed into the weekend with an inside day (making it the first day without a contract high since Tuesday 18th), though an unchanged settlement at 26.35 remains positive. Monday sees a shortened session due to a public holiday in many parts of the world, with No.11 opening at the later time of 7;20am (NY) / 12:30pm (UK). The May’23 expiry is expected to see 18,494 lots (939,542t) tendered, with full details to be published by the exchange on Monday.
There was some MOO buying to print Aug’23 up to $725.00, however it was quickly on the backfoot as the contract highs draw some pricing into the market, which in turn brough a small degree of profit taking. The price slipped to $711.60, though generally held closer to $715.00, and with parties from all sides of the market seemingly content to let things calm following recent exertions the broad sideways pattern was maintained. Recent movement has put sugar way ahead of the wider commodity macro leading there to be little guidance from the rest of the sector, and so while the flat price continued to consolidate any real movement was seen for the spreads and premiums. Aug’23 came under pressure from both sides with yesterday’s Aug/Jul’23 working back down towards $130.00 while the Aug/Oct’23 spread slipped back to $9.10. Such action has previously raised questions as to whether the market may top off, but at the present time while things are being squeezed, they are more reflective of the short-term physical situation while the squeeze reflects the longer-term view, with nobody yet prepared to speculate as to when it will have run enough. The range did extend to $707.50 though the afternoon, but it was generally quiet leading to an inside day heading into the 3-day weekend. Aug’23 settlement was at $711.60, still positive from a technical standpoint should the squeeze maintain next week.
