• Tuesday’s dramatic resurgence in sugar values provided a platform to probe the upside once more. Early activity unsurprisingly saw a steady climb to challenge yesterday’s 14.75 high mark, working through some more noteworthy producer selling on route to an initial high of 14.79. Further spec and algo buying followed as we broke this high around mid-session, pushing ahead to 14.87 before stalling against the greater volume of selling in place ahead of the recent 14.90 high mark. This action positioned Sugar once more at the top of the CRB, as ongoing macro positivity is buoyed by positive fundamental views with talk of the lowest Thai crop in 10 years. A short period of consolidation ensued where it felt as though a push to challenge 14.90/15.00 would follow, but instead we stalled and fell back in two stages as macro failings once more took precedence. The pull-back also caused nearby spreads to give back a portion of their significant earlier gains with March/May back to 0.16 (from a high of 0.22) and May/Jul back to 0.09 (from a high of 0.12). A new period of consolidation saw March’20 back in the 14.50’s before slipping a little further during the final hour to end the day at 14.49. This leaves in place a technical double top for the front month with the swift rejection of the rally suggesting a continuation of a broad 14-15c range for the near term.

undefined

Jon Whybrow

Jon joined CZ in 1991, working in the Treasury department before moving to join the derivatives team in 1994. Over 30 years Jon has built up significant experience across derivatives markets and products, particularly sugar, and is now Head of Flow derivatives providing market execution services for CZ’s global client base. He is responsible for the market commentaries which are published each day on CZ app.

More from this author