The market fell for its fifth consecutive session yesterday to its lowest level since late December on some heavy long liquidation. However, prices did recover settling some 38 points off the lows in an active day. The market had opened 1 point lower before soon coming under renewed selling pressure after the weak previous close and a continuing negative macro picture. Prices continued to weaken during the morning quickly breaching the recent low for the move. Prices declined more sharply as US traders got to their desks hitting the day’s lows just after mid-day. The structure also continued to weaken with the KN dropping 10 points to +14 at one point. Good scale down end user buying was noted on the decline as they continued to catch up with their pricing. Eventually, with the selling waning prices started to improve during the last quarter of the session to settle 10-11 points lower on the day with the KN having recovered to close at 1 point firmer at +25. The NV also improved 3 points to settle at +5. The trading volume was very much better than of late especially in London where the structure also weakened. The KQ dropped over $3.5 to settle at +9.00 while the QV was also weaker at +8.30. This meant the WP took a tumble with the KK WP losing over $6 to end at 100.30 while the NQ also slipped to 96.80. The overall weakness plus the continuing fading of the structure suggests that the near term physical tightness is easing with demand subdued. The continuing weakness of the macro is adding to the negative sentiment as the funds continue to take a risk-on attitude as Corona cases continue to increase across many parts of the world and especially Europe. While the vaccine roll out in the UK has been a success other countries are struggling to get traction in their vaccine programmes. In Brazil ethanol prices have tumbled recently on lack of demand as the country remains in severe lock-down due to very high cases of the virus.
The Brazilian CS 2021/22 cane harvest starts officially at the beginning of April. Apart from concerns over how the cane has coped with the dry weather of last year there is additional concerns over the shipment of sugar once the crush gets underway. As is often the case sugar has to compete with Soybean exports at the beginning of the season. This year the problem is likely to be greater than usual as the Brazilian soybean harvest has been the slowest in 10 years. Brazil usually starts exporting soybeans in January but late plantings and, therefore, late harvest means a larger export window is needed. Brazil is, this season, the world’s main exporter of Soybeans. Adding to the congestion is the still large quantities of sugar to be shipped from last season’s record production. It is going to be a logistical nightmare for many large exporters to juggle their berths to ship both soybeans and sugar come the second quarter this year. The probably shipment delays may continue to aid India in contracting to export more sugar but the main issue is that Brazil is exporting raws while India has more white sugar to export. Last years some vessels had to wait up to 45 days to load sugar this year that may become more the norm.
This morning the market opened 3 points weaker but swiftly recovered 7 points on some light speculative short covering. However, prices soon sagged again and are, currently, around 2-3 points lower. The KN and NV are around unchanged at +25 and +5 respectively. In early London trading the KQ is weaker again at +8.50 as is the QV at +7.80. The macro is mixed this morning with crude slightly higher after hitting its lowest level since early February yesterday. Conversely, the USD index is firmer and has reached its highest level since late November as investors continue to take a cautious view. Yesterday’s weakness is likely to continue in the short term although it would seem unlikely prices will drop back to yesterday’s lows. Nevertheless, the market has reverted to a bearish mode so any recovery would seem limited for the time being with any rally seen as a selling opportunity. However, there are many uncertainties going forward with the Brazilian harvest the main one.
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.
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 24 March
The market fell for its fifth consecutive session yesterday to its lowest level since late December on some heavy long liquidation. However, prices did recover settling some 38 points off the lows in an active day. The market had opened 1 point lower before soon coming under renewed selling pressure after the weak previous close and a continuing negative macro picture. Prices continued to weaken during the morning quickly breaching the recent low for the move. Prices declined more sharply as US traders got to their desks hitting the day’s lows just after mid-day. The structure also continued to weaken with the KN dropping 10 points to +14 at one point. Good scale down end user buying was noted on the decline as they continued to catch up with their pricing. Eventually, with the selling waning prices started to improve during the last quarter of the session to settle 10-11 points lower on the day with the KN having recovered to close at 1 point firmer at +25. The NV also improved 3 points to settle at +5. The trading volume was very much better than of late especially in London where the structure also weakened. The KQ dropped over $3.5 to settle at +9.00 while the QV was also weaker at +8.30. This meant the WP took a tumble with the KK WP losing over $6 to end at 100.30 while the NQ also slipped to 96.80. The overall weakness plus the continuing fading of the structure suggests that the near term physical tightness is easing with demand subdued. The continuing weakness of the macro is adding to the negative sentiment as the funds continue to take a risk-on attitude as Corona cases continue to increase across many parts of the world and especially Europe. While the vaccine roll out in the UK has been a success other countries are struggling to get traction in their vaccine programmes. In Brazil ethanol prices have tumbled recently on lack of demand as the country remains in severe lock-down due to very high cases of the virus.
The Brazilian CS 2021/22 cane harvest starts officially at the beginning of April. Apart from concerns over how the cane has coped with the dry weather of last year there is additional concerns over the shipment of sugar once the crush gets underway. As is often the case sugar has to compete with Soybean exports at the beginning of the season. This year the problem is likely to be greater than usual as the Brazilian soybean harvest has been the slowest in 10 years. Brazil usually starts exporting soybeans in January but late plantings and, therefore, late harvest means a larger export window is needed. Brazil is, this season, the world’s main exporter of Soybeans. Adding to the congestion is the still large quantities of sugar to be shipped from last season’s record production. It is going to be a logistical nightmare for many large exporters to juggle their berths to ship both soybeans and sugar come the second quarter this year. The probably shipment delays may continue to aid India in contracting to export more sugar but the main issue is that Brazil is exporting raws while India has more white sugar to export. Last years some vessels had to wait up to 45 days to load sugar this year that may become more the norm.
This morning the market opened 3 points weaker but swiftly recovered 7 points on some light speculative short covering. However, prices soon sagged again and are, currently, around 2-3 points lower. The KN and NV are around unchanged at +25 and +5 respectively. In early London trading the KQ is weaker again at +8.50 as is the QV at +7.80. The macro is mixed this morning with crude slightly higher after hitting its lowest level since early February yesterday. Conversely, the USD index is firmer and has reached its highest level since late November as investors continue to take a cautious view. Yesterday’s weakness is likely to continue in the short term although it would seem unlikely prices will drop back to yesterday’s lows. Nevertheless, the market has reverted to a bearish mode so any recovery would seem limited for the time being with any rally seen as a selling opportunity. However, there are many uncertainties going forward with the Brazilian harvest the main one.
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.
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.
© 2025 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.
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