Sugar #11 May’22
The day commenced with some calm trading and this situation was maintained throughout the morning with nearby values holding a tight range either side of last night’s settlement level. The sideways pattern was in stark contrast to the wider macro which continues to show far greater reaction to the Ukraine situation with brent crude approaching $120 per barrel this morning, and with the flat price inactive so the spreads too remained subdued. The situation showed no change with the start of the Americas day and when the range did extend it was to the downside, maybe the lack of action encouraging the sellers as May’22 traded to 18.45. The fall did not last for long and the recovery acted as the catalyst to make some more significant gains as the market moved to new daily highs and encouraged a fresh wave of spec buying into the May’22 contract. Producer scales continued at each point higher however the volumes flowing in were increasingly significant, building the momentum to reach 18.90 before some profit taking set in. Spreads too were recovering from their malaise with May/Jul’22 trading back up to 0.21 points (from a low at 0.14) though this is still shy of recent highs at 0.25 and emphasises the spec nature of recent movements versus the macro with no shift to the fundamental picture. A pause in the buying through the final hour served only to allow some consolidation with longs returning ahead of the call to push toward 19c and ensure another strong technical conclusion at 18.93. The high at 18.98 matched the yearly high so far of 20th January, working above which will bring the December highs at 19.47 into the picture as the next target.
