Sugar #11 Mar ’21
The New Year commenced positively as March’21 immediately gapped up above last Fridays 15.53 high mark to challenge and push beyond the contract high level at 15.66 established on 17th November. All the early momentum was being generated by specs who have been reinvigorated by the desire to push upward ahead of the year end and having moved into positive ground they looked to build upon the technical strength with the next continuation target at 15.90 basis the 3 year high mark. In an impressive show of strength this target was reached by the end of the morning as buyers continued to feed in and send the market up through the limited scale selling, while by now we were also seeing some more significant widening of the nearby spreads. A brief pause for breath ahead of the US morning soon led into a more aggressive wave of buying to bring 16c into sight, and despite some fresh producer selling emerging at the higher levels the market relentlessly pushed ahead with a few more buy stops triggered on the way to a new high mark of 16.13. With the market at the highs we saw March/May out to 0.93 points and May/Jul’21 to 0.67 points, though these values lost a little ground soon after as some profit taking edged the flat price back beneath 16c and into the range. What started as some profit taking then led to something a little more worrying for the bulls as a lack of any meaningful underlying support saw March’21 all the way back to 15.57 to be just two points above the morning lows as we moved into the final couple of hours. The longs were never going to lie down and allow prices to further erode and the final couple of hours saw them dig in with supportive buying to ensure a positive settlement level at 15.76. The COT is expected to show an increase in the fund long holding however will only cover the period to last Tuesday when March’21 ended only just above 15c. Today’s volume of around 200,000 lots will have seen significant new longs added, now we await to see what the appetite for the specs is to continue buying and discover whether the failure to hold above 16c and the overbought short term technical factors impact upon it.
Sugar #5 Mar ’21
There were already early gains on the board from No.11 which caused us to gap higher on this mornings opening, beginning the year on the most positive of notes by trading above the former $425.70 March’21 contract high in the opening moments with buy stops triggered. A short pause followed however the market soon gathered itself and began a steady upward path which led beyond $431 by the end of the morning with selling remaining relatively thin despite the higher market levels. Further gains were made as US based funds came online with the market now forging a fresh technical path and soon afterwards another burst of buying hit something of a vacuum which allowed the front month to spike upward to $439.10 before retreating as selling chased into the front month. Spreads saw a degree of volatility on the way upward with March/May’21 widening out to $11.90 and March/Aug’21 to $22.80, while in the flat price volatility there were some sharp movements for the white premiums albeit only against odd lots of trade due to the illiquidity of the whites depth, March/March’21 pushing towards $84 from $78 earlier in the day, May/May’21 to $92 and Aug/Jul’21 briefly above $94. The afternoon then saw an easing in the market as some long liquidation crept in, pushing process back down through the daily range with very limited buying showing as trade participants unsurprisingly hold back in the belief that the wider fundamental picture will bring better pricing opportunities over time. The decline led all the way to $425.80 but having found technical support against the former contract high there was a resurgence during the final stages and approaching the close the March’21 contract was back above $430 once again. MOC buying ensured a positive close at $430.30, technically positive despite the fact that short term indicators are becoming increasingly overbought having now rallied by more than $40 since December 21st.
ICE Futures U.S. Sugar No.11 Contract
ICE Europe White Sugar Futures Contract
