Sugar #11 Mar ’22
So often markets will throw up bit of a surprise when it is not expected and yesterday’s move was one such occasion as we moved up to break up from the recent range in which we had begun to feel rather deep rooted. This morning saw a quiet continuation of this trend with spec buyers continuing to be prominent, buoyed by both our technical strength alongside the more general recent strength of the softs sector. A small blip as March’22 dropped back to 20.39 was quickly forgotten with the steady support taking the price up to new recent highs in the 20.50’s ahead of the US morning as longs looked to larger specs to bolster their efforts. This strategy proved to be successful with the next wave of buying triggering buy stops above 20.60 and extended the move to 20.69, though heavier ricing was emerging at the higher levels and tempered further progress. That producers are taking advantage of the higher levels can be no surprise given that the relative currency position provides fantastic return to Brazilian millers, while Indian interest can also be anticipated in this area. March/May’22 widened out a little further to 0.39 points however is still not wholly convincing given the position of the flat price, though both positions did show signs of pulling away from the rest of the board. These gains were then given back as some profit taking emerged, confirming that the move was predominantly due to specs rather than trade activity, a factor which may limit the long term prospects should consumers/end users not want to follow higher. Progressing through the afternoon we saw yet more liquidation not only wipe out the morning gains but also a chunk of yesterdays with March’22 falling back through the initial support to a 20.10 low. An attempt at recovery struggled to gain traction and with March/May’22 back beneath 0.30 points the flat price found further liquidation on the close to settle at 20.18. Overall it was a very disappointing performance which suggests were are merely extending the range upward with fundamental factors still capping the market unless the specs can find more significant ammunition with which to push.
Sugar #5 Mar ’22
White sugar has been reinvigorated over the past couple of sessions and we continued this progress as early buying immediately pushed March’22 to another new life of contract high. While these early gains were short-lived as selling came in to take advantage of the higher levels the market continued to consolidate just beneath last night’s closing levels and this provided a decent platform from which to look higher again later. There was more challenge being faced by the white premiums which lost more ground as we failed to keep pace with gains in No.11 and March/March’22 lost around $3 over the morning to be trading near to $71.00. Upward interest resumed as we moved into the afternoon, the increased presence of US specs in the No.11 pulling us along to see March’22 all the way to $527.40 before some profit taking set in to cap things off. The correction was initially minor however with no fresh buying appearing an acceleration took place down through a vacuum to see a low at $516.20 before we were able to dig in and attempt to re-stabilise. The efforts of the final couple of hours were undone during the last 10 minutes as late selling sent March’22 down to $516.00, settling just above at $516.60. It was amazing how quickly the shine of new contract highs faded, and despite the earlier bright prospects the market seemingly remains unable to make a clean break and we appear to have simply extended the upward parameters/raised the range.
