Sugar 11 Mar’22
Some early buying edged March’22 up to 19.18 but the rally was short-lived and once the initial cover had been taken prices gradually eased back lower to peek beneath 19c during the late morning. The recovery has reinvigorated sentiment despite some conflicting views as to crop progress/prospects in Thailand and Brazil, but with buying now being driven again by the specs as consumers hold to lower levels we soon resumed upward, progressing to 19.29 over a few hours during the early afternoon. The picture was appearing positive despite a neutral macro environment, with selling proving limited still as a further improvement in the USDBRL to 5.44 makes the price less attractive to the already reluctant producer sector. With the prospects appearing good for another strong performance the market started to reverse against profit taking from longs, with gentle movement initially until sell stops triggered and sent the price down quickly to match the morning lows. Suddenly the market appeared vulnerable and as specs and day traders piled on the pressure so new session lows were recorded at 18.87 as we headed into the close. Settlement was made a little way above this at 18.93 to finish lower on the day and provide the first sign that we may see some cooling of the recent move for the time being at least.
Sugar #5 Mar’22
Having taken something of a pummelling yesterday the March’22 contract emerged positively with the price immediately pulled up to $514.80, strength which widened the March/May’22 spread back to $9.50 and the March’22 white premium to $92. A short period of consolidation then gave way to a sharp correction which by mid-morning had more than erased the gains to leave the price all the way back down to $508.00. For such large movements, the volume was decidedly low, and this remained the case as prices climbed back into the range over the following hours with the signs of fatigue seen yesterday again showing. For much of the session the picture was decidedly calm however the final couple of hours showed the twitchy nature at present with a sharp drop to new lows at $507.40, again impacting the premium which dropped towards $88. Another shove lower during the final hour extended the range further still and cemented an outside day for the chart, with a close for March’22 at $507.30 ensuring some technical pressure which may lead to a further retreat in the near term.
