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Another solid performance seen yesterday as prices improved again with settlement at the highest level since early January 2018 (front month). Nevertheless, values were unable to break decisively higher making just a 1 point improvement on the high for the move. The market had opened 5 points better, on the back of a stronger London settlement the previous day when NY was closed for National holiday. However, prices soon retreated as the usual market-on-selling appeared taking prices down 11 points from the opening levels. This turned out to be the low of the day with good buying noted at 14.40 and below. The market trod water for much of the morning caught within a narrow 8 point range. Once US traders started to get to their desks prices started to improve as a bout of fund buying took prices up to the recent highs where good selling was encountered. Although the high of last Thursday was bettered it was only by one point. It did not trigger any significant additional fund buying so it was not too surprising prices then dropping 14 points on a bout of long liquidation. However, by the close prices were back to just shy of the highs and looking primed to make another push higher today. The HK ended 1 point firmer at +6 while the KN was a couple of points firmer at +6 as well. In London the HK improved to end at +3.50 while the KQ was also firmer closing at +3.10. With the funds in a distinctly buying mood it is not too surprising prices remained firm yesterday – it was probably only odd that more extensive gains were not seen. Good producer selling noted on a scale up basis and the funds/specs are being more circumspect now the market is slightly over-bought and they are probably around 120k lots net long.
There was little fresh news around yesterday. The Indian and Thai harvest are both lagging significantly behind last year’s production (which, it should be remembered, were both record production). Sentiment is now more positive than it has been for a couple of years although tempered because of high stocks, slowing consumption and Brazil’s ability to increase sugar production if the price is right. Brazilian millers are taking a keen interest further down the board which does not bode too well for the 2020/21 season when Indian production is likely to push back to over 30 million tonnes.
Contact the ADMISI Sugar Desk team:
Howard Jenkins, Charles Branch, Kevin Watkins, Steven Trigg
Phone: +44(0) 207 716 8598
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.
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ADMISI is a wholly owned subsidiary of Archer Daniels Midland (UK) Limited and indirectly is a wholly owned subsidiary of the Archer Daniels Midland Company (ADM).
ADM Investor Services International Limited is authorised and regulated by the Financial Conduct Authority and a member of the London Stock Exchange.