There was steady buying around during the early stages and this provided a platform for spec buyers to send Oct’22 up through yesterdays highs, reaching 18.59 which is the highest level since 15th August. The move quickly peaked as the buying dried back up and such is the thin nature of the market within the range that long liquidation soon sent the price tumbling back to new session lows. Oct’22 spreads had in fact been weaker on this morning movement with Oct’22/March’23 sitting quietly in the mid 0.30’s, however that soon changed as a second push higher gathered pace during the afternoon. The Oct’22 contract surged to match the morning high the spread widened all that way to 0.53 points before easing back into the range. In amongst these movements, we had publication of the latest UNICA numbers, showing that for the second half of August there was cane production of 44.026mmt / Sugar production at 3.319mmt / Mix at 48.45% / ATR 154.46 kg/t. These figures were marginally above the market consensus and aided a correction in the market back to the 18.30 area, marking yet another recent failure for the market between 18.50/18.60. The remainder of the session played out in the 18.30’s, not disastrous by any scale but disappointing despite a mildly higher settlement value at 18.38.
A very strong start to the day saw Dec’22 pushing up to new contract highs, reaching $558.80 before easing back on a combination of profit taking and pricing orders. Oct’22 meanwhile was making its own contract highs again as we head towards expiry, though having seen the Oct/Dec’22 commence at $66.00 the spread was losing ground with rolling from the long side proving harder to find. Something of a rollercoaster followed for Dec’22 as prices eroded back down through the range before recovering toward morning highs against spec buying brought in from US based traders, while throughout the flat price movements we saw The Oct/Dec’22 spread continuing to struggle with trades down to $48.50, a whopping $17.50 beneath opening levels. Such significant price movements as seen recently come with risks and so the sharp correction seen during the afternoon was not overly surprising as more longs exited into a sizable vacuum. This left Dec’22 back below $550.00 where it remained through the closing stages, while Oct’22 moved toward Thursdays expiry with a strong conclusion that saw Oct/Dec’22 settle at $59.30. Despite ending the day almost $12 shy of the highs there remains reason for positivity in Dec’22 going forward, though the current overbought status means that some cooling of progress for the near term would be beneficial to the technical picture.
