Sugar #11 Mar’22
There was initial buying which took prices higher during the early stages with March’22 reaching to 18.36 before cooling a little. This stability was attributed to a broadly firmer macro picture though there was no doubt also a level of hedge lifting behind the move with the lower levels continuing to provide opportunity. Any spec interest which was present soon dissipated however and this led us into another morning of struggle through which prices eased back to sit just a few points ahead of last Friday’s lows. With the picture again looking vulnerable as we moved towards the start of the Americas day some further spec liquidation emerged (something that the COT figure at 83,061 lots suggests we may see more of) and this forced March’22 quickly beneath 18.00 before entering into a period of consolidation which lasted through into the afternoon. Steady scale buying was being seen at every point beneath 18c as consumers move to price in front of this months 17.60 low and the current ethanol parity value, and this helped to keep things in check for a few hours though at no stage did the market look to follow the wider macro and mount any kind of real recovery. The vulnerability resurfaced during the latter stages with a new daily low recorded at 17.90 however there was to be one final twist ahead of month end. Prices rallied by more than 30 points during the final 15 minutes to ensure a far better settlement than anticipated of 18.22, and while the move may have been in part due to position squaring for said month end it may be the boost required to generate some further support as the market looks to find some traction following almost two weeks of decline.
Sugar #5 Mar’22
We had a higher call to start the week in response to a firm macro picture and traded to $498.90 for March’22 before slipping back towards unchanged levels. Despite the wider commodity sector preforming steadily of late it has been a period of struggle for sugar which soon resumed as further selling pressured March’22 down towards $492 and in so doing set the nearby white premium values back by a couple of dollars. A further decline was to follow before the morning was up to further extend the losses beneath $490, though this extension saw the white premiums start recovering the early losses as the increased weight of spec selling weighed more heavily upon the No.11 market. Moving through into the afternoon prices were taken up a small way from the lows on both flat price and spread buying, and though any recovery was slight with the market never moving back above $494 it was a showing of relative positivity for the spot month as March/May’22 extended out to $10.30 and the March’22 premium worked back toward $95. Further pressure on No.11 values dragged the price back down to the $490 area as we moved through the final hour however a closing rally ensued to bring prices back away from the lows with settlement made at $492.50. No.11 was even more aggressive in its closing rally, impacting the premium and leaving March/March’22 ending the day back at $90.80.
