Another mixed start for the market saw March’23 trading within a few points either side of unchanged through the first hour of trading, consolidating the progress made yesterday on low volume. The lack of any selling then inspired a rally, likely driven by day trader/algo interest, which took March’23 up to 19.40 in quick time on relatively light volume to improve the outlook for longs as the market attempts to build a sustainable base. A pause in the rally followed although outright and spread values remained firm with March/May’23 holding at 1.17 points, ahead of new highs being made as the US morning approached. With a little more spec/algo support now being found the pattern maintained to take the market onward to 19.54 where things topped out with some liquidation/profit taking seen which allowed for further consolidation. Though there was no real macro support, the specs were showing that for sugar they have their own agenda currently as the later afternoon saw yet another aggressive punch upwards, this time taking the market as far as 19.83. The move was aided by a lack of producer selling, with the spec/algo dominance in proceedings evidenced by the extreme widening of March’23 spread values and reluctance of the rest of the board to follow, March/May’23 reaching 1.38 points and March/Jul’23 out to a mighty 2.14 points. The closing period saw some end of day position squaring to send the price back to 19.64, however the specs are most certainly re-engaged and while a return to December highs seems unlikely there may be more volatility to follow in the coming days.
There were light early gains for March’23 as the market looked to build upon yesterday’s recovery, and by mid-morning the picture was again looking rather buoyant. Buying centred upon the spot month with March’23 surging through what limited selling was on offer to reach $545.60, with spreads also attracting some moderate buying to take March/May’23 back above $20.00. Movement was coming despite the macro cooling, illustrating how sugar is currently detached from the wider world and doing its own thing, and with sizable longs remaining in the market this provided the opportunity for more buyers to follow in to try and maximise the potential. Over the next few hours the push continued, leading to a high at $547.90 being recorded before the pace of buying reduced allowing for a small retreat back into the range. A period of calm ensued before specs resumed their buying during the later afternoon, leading March’23 to new session highs at $550.70 ahead of the close, although some late position squaring meant that settlement value was back in the range at $546.10. Spreads also worked back from the highs on this late movement though overall the longs will be encouraged by a second consecutive positive showing.
