A rather muted start to the new week saw prices holding within a tight band, though with no significant selling showing beneath 21c the market was under no pressure and able to gather itself for a continuation of last week’s progression. Fridays’ COT report had shown a small reduction in the new speculative long position to 156,000 lots, though coming as it did with the March’23 contract valued all the way back at 19.88 it is safe to assume that a sizable long has been added in the ensuing three sessions (alongside some commercial buying also). By late morning March’23 had manoeuvred itself up through 21c to be drawing another set of interest from both specs and commercials, rising sharply to 21.26 before finding resistance as new producer selling orders were entered interest into market terminals. This stalled progress and created something of an attritional environment for the next few hours, the market topping out at new contract highs for 21.33 for March’23 and 19.94 for May’23 before finally easing back as an element of profit taking kicked in. Support remained in place to recover values as the final hour arrived, but it lacked the earlier punch and so we reached the close still shy of the highs (though above the previous contract highs) at 21.21. The movement takes the market further to overbought territory though while the buying continues there seems little chance of a reversal. Should it dry up however there will be a wariness that we see something similar to last December, a factor that will be no doubt playing on the minds of some.
Despite the general sentiment remaining positive toward sugar following last week’s exploits there was a distinct lack of buying for whites as we got underway leading prices to slump across the first hour or so. The early losses led white premiums to give back a few dollars with March/March’23 down to $95 and May/May’23 nudging at $117.00 though the deficit was reduced soon afterwards as buying crept in to bring prices back up towards unchanged levels. With the momentum salvaged we then saw the market set about continuing its march higher, led by the May’23 contract which is now attracting the bulk of the buying as March’23 moves towards expiry, the open Interest of each set to cross following todays activity with March’23 currently standing at 32,867 lots and May’23 at 31,567 lots. Spread volume was again significant with more than 4,000 lots March/May’23 changing hands to a narrowest $7.10 as funds continue to move positions forward, though that did not prevent May’23 from recording another set of contract highs through the afternoon. The progression eventually reached to $560.70 and though we faltered a touch during the final hour there was some closing support to ensure another strong settlement at $568.70.
