Good morning,
Yesterday saw a relative quiet session with a delayed opening and London closed for Easter Monday. The market opened 3 points firmer after hitting from 4 month lows on the previous Thursday. The market continued to improve for the early part of the afternoon before dipping back to unchanged. Enough support was found for prices to quickly improve again hitting the highs of the day before selling was found above 14.95. Prices eased back by the close to settle some 12 points off the highs. The main feature of the market was the improvement in the front spread that improved 10 points from flat on Thursday’s close. The NV was also 5 points firmer ending at +4. Chatter about some physical off-take seemed to be the catalyst for the improvement in the structure. Tenders issued by Ethiopia and Pakistan and some talk that there was some Chinese buying interest although nothing solid was reported. The buying is probably understandable given the collapse in prices recently. London also saw some strength in the structure on Thursday with the KQ improving $1.70 to settle at +4.70 while the QV was just under $2 better at +6.40.
The COT, as of the 30th March showed that the funds/specs had cut their net long position yet again by 16,340 to 152,783 which was expected given the drop from above 15.50 during the reporting period. The non-commercials cut their net long position by 9,265 to 105,749 as they continued to cut their longs. They have trimmed around 50k lots of longs since the end of January. They are likely to be around 100k net long currently. The commercials cut their net shorts by 26,087 to 389,374 as good end-user pricing was seen again as they took advantage of falling prices with the trade also cutting shorts. The Index funds cut their net longs by 9,747 to 236,591.
By the end of March total Indian sugar production had hit 27.75 million tonnes compared with 23.31 million tonnes at the same time last season. A total of 503 mills crushed cane this season compared with 457 mills last season. As of the 31st March 221 mills were still operating compared with 186 mills this time last year. Total production continues to look likely to hit around 30 million tonnes.
The Thai 2020/21 harvest is now over. 7.57 million tonnes of sugar were produced some 700k tonnes less than last season. Total cane crushed dropped by 11% to 66.66 million tonnes as the crop continued to be impacted by the long dry period and less plantings due to low sugar prices and competition from other crops. There is a general view that production will improve next season but it is far too early to make any accurate predictions. At the moment estimates are for a cane crop of between 80-100 million tonnes.
This morning the market opened 4 points lower but quickly improved on some light buying aided by a positive macro picture. Currently, prices back to the highs of yesterday and about 12 points firmer. The KN is unchanged at +10 while the NV is 1 point firmer at +5. In London the KQ is firmer at +5.20 while the QV is also firmer at +6.70. As mentioned the macro picture is slightly positive this morning with crude firmer and most other commodities trending slightly higher while the USD index is around unchanged after dropping from its near 5 month highs since the beginning of the month. The is a general view that, perhaps, sugar prices have fallen enough and may improve especially as the structure is also strengthening. The macro may also continue to improve although the continuing rises in Corona cases across many regions is likely to cap any significant gains.
Contact the ADMISI Sugar Desk team:
Howard Jenkins, Kevin Watkins, Steven Trigg
Phone: +44(0) 20 7716 8598
Email: admisi.sugar@admisi.com
Registered in England No. 2547805 a subsidiary of Archer Daniels Midland Company. Risk Warning: Investments in Equities, CFDs, 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 indeed may incur additional liabilities. These Investments may entail above average financial risk of loss, and investors should therefore carefully consider whether their financial circumstances and investment experience permit them to invest and, if necessary, seek the advice of an independent Financial Advisor. Some services described are not available to certain customers due to regulatory constraints either in the United Kingdom or elsewhere.
Sugar Market Report for 6 April
Good morning,
Yesterday saw a relative quiet session with a delayed opening and London closed for Easter Monday. The market opened 3 points firmer after hitting from 4 month lows on the previous Thursday. The market continued to improve for the early part of the afternoon before dipping back to unchanged. Enough support was found for prices to quickly improve again hitting the highs of the day before selling was found above 14.95. Prices eased back by the close to settle some 12 points off the highs. The main feature of the market was the improvement in the front spread that improved 10 points from flat on Thursday’s close. The NV was also 5 points firmer ending at +4. Chatter about some physical off-take seemed to be the catalyst for the improvement in the structure. Tenders issued by Ethiopia and Pakistan and some talk that there was some Chinese buying interest although nothing solid was reported. The buying is probably understandable given the collapse in prices recently. London also saw some strength in the structure on Thursday with the KQ improving $1.70 to settle at +4.70 while the QV was just under $2 better at +6.40.
The COT, as of the 30th March showed that the funds/specs had cut their net long position yet again by 16,340 to 152,783 which was expected given the drop from above 15.50 during the reporting period. The non-commercials cut their net long position by 9,265 to 105,749 as they continued to cut their longs. They have trimmed around 50k lots of longs since the end of January. They are likely to be around 100k net long currently. The commercials cut their net shorts by 26,087 to 389,374 as good end-user pricing was seen again as they took advantage of falling prices with the trade also cutting shorts. The Index funds cut their net longs by 9,747 to 236,591.
By the end of March total Indian sugar production had hit 27.75 million tonnes compared with 23.31 million tonnes at the same time last season. A total of 503 mills crushed cane this season compared with 457 mills last season. As of the 31st March 221 mills were still operating compared with 186 mills this time last year. Total production continues to look likely to hit around 30 million tonnes.
The Thai 2020/21 harvest is now over. 7.57 million tonnes of sugar were produced some 700k tonnes less than last season. Total cane crushed dropped by 11% to 66.66 million tonnes as the crop continued to be impacted by the long dry period and less plantings due to low sugar prices and competition from other crops. There is a general view that production will improve next season but it is far too early to make any accurate predictions. At the moment estimates are for a cane crop of between 80-100 million tonnes.
This morning the market opened 4 points lower but quickly improved on some light buying aided by a positive macro picture. Currently, prices back to the highs of yesterday and about 12 points firmer. The KN is unchanged at +10 while the NV is 1 point firmer at +5. In London the KQ is firmer at +5.20 while the QV is also firmer at +6.70. As mentioned the macro picture is slightly positive this morning with crude firmer and most other commodities trending slightly higher while the USD index is around unchanged after dropping from its near 5 month highs since the beginning of the month. The is a general view that, perhaps, sugar prices have fallen enough and may improve especially as the structure is also strengthening. The macro may also continue to improve although the continuing rises in Corona cases across many regions is likely to cap any significant gains.
Contact the ADMISI Sugar Desk team:
Howard Jenkins, Kevin Watkins, Steven Trigg
Phone: +44(0) 20 7716 8598
Email: admisi.sugar@admisi.com
Registered in England No. 2547805 a subsidiary of Archer Daniels Midland Company. Risk Warning: Investments in Equities, CFDs, 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 indeed may incur additional liabilities. These Investments may entail above average financial risk of loss, and investors should therefore carefully consider whether their financial circumstances and investment experience permit them to invest and, if necessary, seek the advice of an independent Financial Advisor. Some services described are not available to certain customers due to regulatory constraints either in the United Kingdom or elsewhere.
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.
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