Weakness across the commodity macro drew some selling in to commence trading in the 18.30’s, however sugar continues to do its own thing and defensive buying then appeared to pull the price back up and match yesterday’s 18.49 high. A slow period then ensued with prices consolidating quietly, though as the Americas day commenced so pressure was again brought to bear with the still weak macro encouraging some light spec liquidation to send March’23 back towards the morning lows. The downward move gathered additional momentum with specs selling as they continue to flit in and out of the market within the range, though prices only declined as far as 18.20 to mark a higher low than past couple of days. We moved back into the range with a sharp bout of short covering before playing out the final couple of hours tediously as longs attempted to minimise the losses. Closing activity saw defensive buying ensure an unchanged settlement level at 18.47 as we move into Friday.
Mixed opening activity saw nearby prompts trading either side of unchanged levels, and with flat price activity fairly limited the market settled into a tight range for the rest of the morning. Most of the early volume was traded through the Dec’22/March’23 spread as rolling continues ahead of expiry, with the morning movements seeing a widening to $33.00 which forced the March’23 price lower while Dec’22 held little changed. With pressure mounting upon the macro so the market started to extend the range lower, taking Dec’22 down to $529.00 and March’23 to $499.50 before uncovering some support as we approached the lows of the past couple of days. With the wider spec community now online the Dec’22/March’23 spread also gave back its earlier gains, trading down below $29.00 despite the roll volume being relatively modest. The picture was not looking good however the selling eased, and with-it prices were able to pull back up into the range, efforts being made to consolidate away from last weeks lows though only serving to ensure an inside day which likely leaves the market continuing to drift. MOC activity left us with settlement levels at $535.90 (Dec’22) and $506.40 (March’23) to conclude another dull session.
