Sugar #11 Mar ’22
A weak technical picture now casts a shadow over the sugar market and following a brief opening pop to 18.71 we resumed the downward path as light selling (and a lack of buying) allowed the March’22 contract to decline to 18.51. A recovery back to the 18.60’s followed and with news rather thin on the ground the market enjoyed a period of respite holding quietly between 18.59 and 18.70 through into the early afternoon. The calm was broken with news that Russia’s proposal for Opec+ to proceed with a 400,000 barrel per day increase for January had been agreed, encouraging spec selling around the macro with March’22 falling from 18.58 to 18.46 on more than 6,000 lots. That this selling didn’t have a greater impact was due to the continued sizable scale buying in place and from a low at 18.46 we soon recovered back into the range. Despite the negativity of both the technical picture and the macro there remains a desire from some to try and move the price higher and mount a recovery, but their efforts today could only reach to 18.78 as progress stalled shy of the former 18.82 low which now provides the first resistance point. The final hour saw prices ease back to sit mid-range yet again, ending a calmer day at 18.62 with the negative bias still in place.
Sugar #5 Mar ’22
The latest lower close triggered the usual opening buying against hedge lifting though todays higher start was incredibly short-lived with prices soon retreating to be trading a dollar beneath unchanged within the first hour. The environment was far calmer than recent days and we settled into a comfortable band for the rest of the morning on low volumes, it seems as though many participants are looking to regroup and take stock of the situation so this calm will have been welcomed. Little changed during the early afternoon however news that Opec+ will be maintaining their additional 400,000 barrel per day production during January sent the crude price tumbling further and with it brought a degree of fresh selling to the macro. Sugar held up remarkably well against this with a slight downward extension to $482.50 soon picked back up, its impact almost negligible as we returned to sit within the same range once more. There were some small moves to extend the range during the final couple of hours as prices continued to chop around however by and large it remained very quiet. Closing activity was played out quietly to conclude marginally higher for March’22 at $484.70, though whether it can represent the start of a revival remains to be seen with a lot of work still needed to recover the technical picture.
