Insight Focus
Raw sugar futures traded lower between 18-19c/lb. Speculators closed out long positions. Both producers and end-users have added to their positions.
New York No.11 Raw Sugar Futures
The raw sugar futures market traded between 19-20c/lb for most of last week, before trading lower in the 18-19c/lb range on Thursday, hitting 18.7c/lb by Friday’s close.
Both producers and end-users have opened fresh positions for the second week. Producers opened 1.1k lots of short positions, while end-users opened significantly more positions at 7k lots of long positions.
On the other hand, speculators have closed out their long positions over the past week by 3.4k lots but opened a smaller number of short positions at 1.8k lots.
The net spec position now stands at 1.4k lots, remaining neutral.
The No.11 futures curve has flattened across the board.
London No.5 Refined Sugar Futures
The No.5 refined sugar futures traded between 541-571 USD/mt in the past week, closing at 541.2 USD/mt on Friday.
Speculators closed out 3k lots of longs bringing the net spec position down to 23.2k lots.
No.5 Open Interest
The No.5 refined sugar futures curve has flattened across the board and remains in backwardation.
White Premium (Arbitrage)
The V/V white premium, traded between 124-130 USD/mt last week, closing at 129.8 USD/mt on Friday.
The no.11 raw sugar futures market is in carry, while the no.5 refined sugar market is in backwardation. This combination provides a big opportunity for re-export refiners to produce refined sugar profitably.
Many re-exports refiners need around 105-115USD/mt above the No.11 to profitably produce refined sugar. The current white premium is above this level, which means we should theoretically see a pick-up in demand soon.
For a more detailed view of the sugar futures and market data, please refer to the appendix below.
No.11 (Raw Sugar) Appendix
No.5 (White Sugar) Appendix
White Premium Appendix
