Sugar Market Report for 31 August

The shortened session in NY yesterday, due to Bank holiday in UK, saw the market improve again albeit in thin volume. The market had opened unchanged but soon started to climb soon hitting the highs of the day and the highest level since the 18^th August. Prices eased lower on some light profit taking but soon found support below 20.10 which saw prices improve again before settling into a narrow 10 point range through to the close. Nevertheless, it was the highest settlement since early February 2017. The VH continued to remain weak gaining 1 point to end at -63 while the HK finished 2 points firmer at +84. It was another positive performance as prices improve back to the highs seen in the middle of August as the diminishing Brazilian CS crop is being marked down by analysts and the deficit for next season increases.

The COT report, as of the 24^th August, showed the funds/specs cut their net long position by 5,821 to 250,795 which was in line with expectations as the market fell 90 points during the period as prices slipped from the 4 ½ year highs on profit taking. The non-commercials cut their net long position by 2,322 to 199,199. The commercials also saw their net short position cut by 11,614 to 446,267 as some end-user pricing noted and some light trade selling as prices hit highs. The Index funds cut their net long position by 5,792 to 195,471 on the back of some fresh shorts.

It was reported yesterday that Egypt’s state commodity buyer, GASC, bought 200k tonnes of Brazilian raw sugar at the lowest price of $511.00 per tonne C&F. Louis Dreyfus sold 100k tonnes and Viterra another 100k tonnes for October and November arrival.

This morning the market opened 8 points firmer and at the highs of yesterday before slipping 12 points soon dipping into the negative column. Currently, prices are around 5 points lower. The VH and HK are unchanged at -63 and +84 respectively. In London the structure is a tad better with the VZ trading at -21.50 and the ZH at -8.30. The macro is generally positive with grains/soya higher while the USD index is slightly weaker. The market looks poised to test the highs seen on the 17^th August although whether prices can climb much higher remains to be seen. The funds are likely to want prices to remain firm through month end