The morning played out within a narrow 10-point range either side of last night’s close, the market struggling to ascertain its next move as we sit to the centre of the wider range. There was a recovery taking place for other commodities though having had little intent at following these markets significantly lower yesterday it was maybe not surprising that their gains were similarly being disregarded. Early afternoon then saw a small extension of the range above 19c though we appeared set for a slow day until the situation enlivened midway through the afternoon as fund/spec buying emerged. The move upward gathered pace with some slightly heavier volume changing hands above 19.20, and the buying / short covering persisted until a high had been reached at 19.38. Selling was still light despite the USDBRL remaining in the 5.40’s and when the market topped out it was day trader profit taking rather than producer selling that pushed the price back. Spreads were mildly firmer against the flat price movements, though the board was more uniform in its gains than has been the case recently. Late afternoon played out within the range to leave Oct’22 settling at 19.25 with more action within the wide range expected for the near term.
There were some early losses for the Oct’22 contract as it dragged lower along with the expiring Aug’22 during the first hour. The outright value then pulled back up to hold above $550 once more, though Aug’22 remained weaker with the Aug/Oct’22 holding near to $40. White sugar has proved consistently stronger than the No.11 over recent weeks and months, and that trend continues with the Oct/Oct’22 white premium pushing up to the $135 area as the market moved into positive ground during the early afternoon. No.11 is not without its merits though and as spec buying emerged for that market, so the whites pulled upward too with highs recorded at $561.80. Aug’22 was meanwhile looking set for a delivery in excess of 200,000mt with a miniscule volume making little impact upon the open interest figure of 4,560 lots, though on what little traded we did see a new contract high print at $600.00. The final stages played out to the upper end of the range, ending the day at $559.60 with little resistance in place ahead of the $570.10 contract high, a remarkable turnaround given that there were few visible bulls just a couple of weeks ago.
After the Aug/Oct’22 spread expired at $39.00, the early talk is that there will be a tender of 4,528 lots (226,400 mt) against the Aug’22 expiry. Formal details will be published by the exchange on Monday morning.
