The market improved again yesterday hitting its highest level for nearly three weeks as physical demand increased and the macro picture remained positive. The market opened 15 points firmer and continued to push higher on good fresh buying and limited selling. Prices soon reached the day’s highs and some 135 points off the lows reached a week earlier. The market then remained volatile for the rest of the session finding resistance at 17.80 and support at 17.60 before, eventually settling in the middle of the days’ range. The NV improved in early trading to a slight premium as good buying was seen in the spot month but by the end of the session it had improved by 1 point to -2. The VH ended 3 points weaker at -13. In London there was limited activity with the market struggling to match the gains in NY. The QV did improve slightly to end at -1.30 while the VZ was also a tad firmer at -2.30. However, the WP dropped back with the NQ $2.60 lower at 76.20 while the VV slipped $2.80 to end at 78.00 but interest was limited. A combination of a positive macro, trade and speculative buying with limited scale up selling underpinned by the concerns over the Brazilian CS cane crop would appear to be the main reasons for the improvement. There has been some light sporadic rains across the CS over recent days but it has not been enough to improve things.
Indian sugar production reached 30.568 million tonnes by the end of May some 3.5 million tonnes more than last season at the same point. The harvest is now, essentially over, with just 7 mills still crushing in UP and Tamil Nadu. Attention is now turning to next season. The monsoon is expected to be around average this year but much can happen over the next few months with concerns, as usual, that the coverage of rains will not be uniform. Currently, the general view is that production could be slightly higher next season. ISMA will obtain satellite images across the sugarcane areas at the end of the month which will give an idea on planted area and an estimate to the amount of cane available for harvesting in 2021/22. The government will then have to decide on their export policy for the season. India will, undoubtable, have to export again to keep prices supported for their internal markets. Expected lower consumption due to the pandemic will mean the country continues to hold vast stocks. What export subsidies are given remains to be seen but the government’s recent lowering of the export subsidy probably give a flavour to their thinking. Of course much will depend on world prices but if a small deficit does develop for next season due to Brazilian production then India will be well placed again to plug supply gaps as seen this season.
Copersucar has been given the green light by the Brazilian CADE to become Alvean’s sole shareholder with a 100% stake in the company after the purchase of the 50% stake held by Cargill several months ago. CADE have decided there are no competitive concerns to stop the purchase.
This morning the market opened 8 points firmer in quiet trading. The NV is unchanged at -3 while the VH is 1 point firmer at -12. Currently, prices are holding around 7 points firmer. In early London trading The QV is slightly weaker valued around -1.80 while the VZ is unchanged at -2.30. The macro is a slightly positive picture this morning with most commodities slightly firmer while the USD index is firmer and holding just below 90.00. The BRL has slowly improved recently finishing at 5.15 yesterday which is around its strongest level against the USD this year. Sugar looks set to remain firm and seems likely to push up to the highs of yesterday. Resistance should be seen around 18 cents as that appeared to be the level some Indian sales were contracted last month without export subsidies. The large longer term funds have not shown huge appetite to buy but a push higher may trigger some buying. For the time being the market looks well supported and any dips will be seen as a buying opportunity. End users did take advantage of the dip in prices recently but are still under-priced.
Contact the ADMISI Sugar Desk team:
Phone: +44(0) 20 7716 8598
Email: admisi.sugar@admisi.com
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
Sugar Market Report for 2 June
The market improved again yesterday hitting its highest level for nearly three weeks as physical demand increased and the macro picture remained positive. The market opened 15 points firmer and continued to push higher on good fresh buying and limited selling. Prices soon reached the day’s highs and some 135 points off the lows reached a week earlier. The market then remained volatile for the rest of the session finding resistance at 17.80 and support at 17.60 before, eventually settling in the middle of the days’ range. The NV improved in early trading to a slight premium as good buying was seen in the spot month but by the end of the session it had improved by 1 point to -2. The VH ended 3 points weaker at -13. In London there was limited activity with the market struggling to match the gains in NY. The QV did improve slightly to end at -1.30 while the VZ was also a tad firmer at -2.30. However, the WP dropped back with the NQ $2.60 lower at 76.20 while the VV slipped $2.80 to end at 78.00 but interest was limited. A combination of a positive macro, trade and speculative buying with limited scale up selling underpinned by the concerns over the Brazilian CS cane crop would appear to be the main reasons for the improvement. There has been some light sporadic rains across the CS over recent days but it has not been enough to improve things.
Indian sugar production reached 30.568 million tonnes by the end of May some 3.5 million tonnes more than last season at the same point. The harvest is now, essentially over, with just 7 mills still crushing in UP and Tamil Nadu. Attention is now turning to next season. The monsoon is expected to be around average this year but much can happen over the next few months with concerns, as usual, that the coverage of rains will not be uniform. Currently, the general view is that production could be slightly higher next season. ISMA will obtain satellite images across the sugarcane areas at the end of the month which will give an idea on planted area and an estimate to the amount of cane available for harvesting in 2021/22. The government will then have to decide on their export policy for the season. India will, undoubtable, have to export again to keep prices supported for their internal markets. Expected lower consumption due to the pandemic will mean the country continues to hold vast stocks. What export subsidies are given remains to be seen but the government’s recent lowering of the export subsidy probably give a flavour to their thinking. Of course much will depend on world prices but if a small deficit does develop for next season due to Brazilian production then India will be well placed again to plug supply gaps as seen this season.
Copersucar has been given the green light by the Brazilian CADE to become Alvean’s sole shareholder with a 100% stake in the company after the purchase of the 50% stake held by Cargill several months ago. CADE have decided there are no competitive concerns to stop the purchase.
This morning the market opened 8 points firmer in quiet trading. The NV is unchanged at -3 while the VH is 1 point firmer at -12. Currently, prices are holding around 7 points firmer. In early London trading The QV is slightly weaker valued around -1.80 while the VZ is unchanged at -2.30. The macro is a slightly positive picture this morning with most commodities slightly firmer while the USD index is firmer and holding just below 90.00. The BRL has slowly improved recently finishing at 5.15 yesterday which is around its strongest level against the USD this year. Sugar looks set to remain firm and seems likely to push up to the highs of yesterday. Resistance should be seen around 18 cents as that appeared to be the level some Indian sales were contracted last month without export subsidies. The large longer term funds have not shown huge appetite to buy but a push higher may trigger some buying. For the time being the market looks well supported and any dips will be seen as a buying opportunity. End users did take advantage of the dip in prices recently but are still under-priced.
Contact the ADMISI Sugar Desk team:
Phone: +44(0) 20 7716 8598
Email: admisi.sugar@admisi.com
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2024 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.