Sugar #11 May’22
Macro weakness led by the energy sector led the market to gap lower on today’s opening, reaching 18.70 in the early stages before consolidating. There was a degree of buying being seen by consumers/end users and this held prices for a period however much of their interest then became confined to scale and with some of the newer spec longs losing confidence so further liquidation sent prices through the scales and extended the losses. Volume was proving slightly better today and was aided by improved spread activity, albeit within the same recent trading bands, and at the lower levels the increase in scale buying proved sufficient to hold values. A couple of efforts to push back upward during the afternoon quickly petered out and so it was that the final few hours quietened back down, eventually reaching a May’22 close at 18.73. Talk remains of increased Indian exports and a positive Thai tail, providing a sentiment that matches the macro action so far this week. Crude was trading back into the $90’s this afternoon and while the geopolitical picture retains the potential to be volatile the current picture suggests prices will remain away from the recent highs for the time being.
