Sugar #11 Mar ’22
A poor end to last week and a higher than expected spec long position with the COT showing them at 189,594 lots as at last Tuesday (though likely having liquidated some volume on Thursday/Friday) maintained the negative leaning and we saw quickly prices working lower once again during the early part of today’s session. Initially the decline was gradual however with the softs sector all trading downward today there were a couple of bursts of more vigorous selling which increased the pace of decline and sent the price down to 19.70 where more support was uncovered through consumer pricing. The pace then came out of the selling and this left prices holding a narrow range just ahead of the lows, showing no sign of bouncing with traders seemingly content to let things nudge along quietly. There were suggestions that the decline was stemmed by the recovery in crude from its recent lows, however most recent sessions have shown a more limited connection between the two markets at present with sugar more closely aligned to the softs, and so it seems more likely that we were simply finding our comfort zone again back within the broad range. Efforts to pull back upward consistently tailed off above 19.80 and with the scale support not really being tested a calm conclusion ensued to leave March’22 at 19.76 and March/May’22 at 0.28 which in itself was impressive given the reluctance of the spread to widen significantly when prices shot up last week. With plenty of old lows now lining up below to provide light support the consumers seem likely to maintain their buying interest which could limit losses and should we find a base will bring us back into a range centred around 20c once again.
