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The market settled lower for the first time in five sessions yesterday. A new high for the move was seen in early trading but for the rest of the session prices remained within the range of the previous day. The market had opened 1 point lower before slipping another 4 points. However, prices soon recovered with good speculative buying noted. 20 minutes later a new high was hit (albeit by just one point). Although several attempts were made to push higher the buying was thinner than of late and the selling was boosted by more appearing overnight. By mid-day the market’s inability to move higher triggered a bout of speculative long liquidation with prices swiftly dropping 25 points. Sensing an opportunity more buying appeared which enabled all the losses to be covered with prices back at the highs an hour before settlement. However, another bout of long liquidation took prices off the highs with the market settling some 8 points lower on the day. The HK ended 1 point better at +5 while the KN was also one point firmer at +4. In London the HK improved again ending $4 higher at +4.40 as more short covering noted encouraged by some trade house buying. The KQ was also a little higher ending at +2.20. Yesterday’s action will have surprised few traders. The market was technically over-bought so some attempt at consolidation was needed and seen. There was also a good volume of fresh selling (possibly Thai) that appeared over-night which also put a tighter cap on the up-side of the market. Chatter about Brazilian millers gearing up to sell as ethanol parity loomed into view and the possibility that Indian sugar production will improve back to over 30 million tonnes in 2020/21 also seemed to sober up some of the more rally intoxicated traders.
Contact the ADMISI Sugar Desk team:
Howard Jenkins, Charles Branch, Kevin Watkins, Steven Trigg
Phone: +44(0) 207 716 8598
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