Sugar #11 Mar ’22 

In a continuation of yesterday’s move, Friday was a profit realization day for the longs. Market traded within a 5 pt range around yesterday’s settlement, and by 9am (the good hour…) the selling pressure came, with thin business in the further prompts. The liquidation prompted a weakening of the spreads throughout the whole curve, and we saw the H2-H3 spread come down by 17pts, indicating that physical buyers are in absolutely no rush to offtake. Selling pressure from producers is absolutely absent, even with the very attractive BRL levels present today. Producers seem to be well hedged in 2022, and the total volume for the 2023 crop traded today was around 1k lots.

On the whites side, premiums have been sliding as well, and the HH arb reached 73 USD/mt today. With the funds cutting their long position by more than 2k lots, a 11-week minimum, we saw Dec-21 slide by 8.10 USD/mt, which adds to the very thin physical spot buying pressure. Like yesterday, we have seen consumers on the very long end of the curve securing the lower prices.

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ICE Futures U.S. Sugar No.11 Contract

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ICE Europe Whites Sugar Futures Contract

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Jon Whybrow

Jon joined CZ in 1991, working in the Treasury department before moving to join the derivatives team in 1994. Over 30 years Jon has built up significant experience across derivatives markets and products, particularly sugar, and is now Head of Flow derivatives providing market execution services for CZ’s global client base. He is responsible for the market commentaries which are published each day on CZ app.

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