A volatile opening saw Oct’22 swing from 17.72 to 17.42 across the first 30 minutes, but rather than be a precursor to more volatility the market instead settled down to hold a tight range which lasted for several hours. A couple of efforts were made by shorts to break the malaise and renew the downside over the following hours but these were lacking in volume and with no other interest the price continued to generally hold the 17.40’s until we were well into the afternoon. The market finds itself struggling for direction at present with smaller specs lacking the ability to continue hitting the short side and larger funds seemingly confined to the side-lines against the current fundamental outlook, and so a repeat of yesterdays action whereby short covering took prices back upward and into credit followed. Highs were recorded at 17.74 before stalling, the minor green now showing down the board maintaining the continuing contrarian nature of sugar performance in relation to the commodity macro. The final hour played out quietly before a closing spike to 17.78 failed to have any significant impact on settlement level (17.69), though overall the performance may lead to a little more short covering as we continue to seek a reason to escape the current lower range.
A low volume spike down to $518.00 on the opening was quickly forgotten as the market chopped about within a range in the lower $520’s on thin volume throughout the morning. Corrective action was still being seen for the Oct’22 contract following its spike last week, buying becoming thinner for both spreads and the white premiums at the higher levels which led the Oct/Dec’22 back to $22.90 and the Oct’22 premium to trade to $133.00 as we moved into the afternoon. There was a slide back down to the morning lows as some pressure was exerted from specs during the afternoon, however it came to nothing, and the resultant short covering ensured a return to unchanged levels and new session highs. More significant gains were being seen down the board as the spread pressure continued to weigh on the spot month and a quiet closing period ensured that his situation remained the same to the close, ending the day with Oct’22 a couple of dollars lower at $522.10 but all other positions mildly positive.
