There were some small early gains for Oct’22 as we waited to see whether yesterday’s move away from the lows might lead to some continuing recovery, however with the overnight hedging concluded things soon settled down with prices easing back to consolidate the 18.40’s. There was nothing in the macro to halt yesterday’s recovery and so the lack of any momentum indicates a lack of interest from specs in re-buying sugar at the present time despite the wider environment. Meanwhile, notwithstanding the small spec/day trader activity, there seems little interest in turning short, and so having reduced positions the scenario which developed over the following hours of slow, low volume, sideways trading may be one that we have to get used to for the near term as Jul’22 moves off the board. The market continued within the range as we moved through the afternoon, and it was only during the final hour that Oct’22 moved positively to match the morning 18.55 high (possibly pulled up by softs related interest due to a surge in the coffee price) with settlement just beneath at 18.51. This maintained the efforts of yesterday and may help in establishing a bottom, though being an inside day, it does not inspire a great deal of confidence that we will climb significantly.
· Jul’22 looks set to see a delivery below 1mmt with open interest having dropped again to 23,243 lots at last night’s close. Spread action has become a little more illiquid as the final positions are closed out, today seeing Jul/Oct’22 range from -0.08 points to +0.09 points on the post close, with settlement at +0.04 points.
