Sugar #11 May’22
Today was a slow day for the market with just 30,221 lots traded in the prompt contract and all within a very narrow range. We began proceedings by taking a look at the 19c level, selling off the open pushed us to a low of 19.03 however this soon ran out of momentum and the market stagnated. A flurry of buying mid-morning set the tone for the rest of the day, with an idea perhaps to break higher and look towards 20c. This move was encouraged by an extraordinary performance from the Brazilian Real, trading to 4.84 at the time of writing and approaching a two year high. Given that we are outside the crop season in Brazil the muted market reaction is perhaps to be expected, however should this appreciation continue ethanol parity will certainly become a major talking point as we move through the year. A lack of momentum to the upside put paid to any hopes of breaking higher, and as we approached the close the market drifted lower, finally settling just 9pts up at 19.24c.
