Insight Focus
Both raw and refined sugar futures have moved sideways to lower in the past week. No order flow stress among market participants, and speculators continue to show little interest in the raw sugar market.
New York No.11 Raw Sugar Futures
Raw sugar futures prices are drifting lower, trading near the 50-day moving average, with prices currently hovering around 21c/lb.
Over the past week, the commercial participants closed a similar number of positions, with producers closing 4.3k lots and consumers 2k lots, reducing the overall net commercial position to -200k.
In the absence of any major order flow imbalances, let’s turn our attention to the speculators.
In recent weeks, spec interest in raw sugar has remained muted. According to the latest CFTC report (as of November 26th) speculators closed around 3.9k lots of long positions while slightly increasing their shorts by 342 lots.
As such, the net speculative position has fallen to -4.5k lots.
The No. 11 forward curve has weakened since last week and remains in backwardation.
London No.5 Refined Sugar Futures
Similar to the No. 11, the No. 5 refined sugar futures have also traded sideways to lower over the past week, now standing at 547 USD/tonne.
Over the past week, speculators have closed out 4,300 lots of long positions, reducing the net spec position to 34,700 lots.
No.5 Open Interest
The No.5 refined sugar futures curve has weakened across the board.
White Premium (Arbitrage)
With the No. 11 and No. 5 sugar futures making similar moves, the H/H white premiums have traded lower and are currently at USD 83/tonne.
Many re-export refiners need around USD 105-115/tonne above the No.11 to profitably produce refined sugar. The current white premium is below this level, signalling to toll refiners to slow their operations.
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
