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The market saw another dip lower yesterday before recovering to settle marginally higher as the upside momentum was maintained. The market had opened 4 points firmer before immediately dropping lower losing another 22 points over the next 40 minutes. Good support noted at prices approached 14.50 which brought in some light fresh trade buying which buoyed prices slightly. Better gains were seen during the afternoon as prices pushed into the plus column and back to opening levels. However, prices fell away again to register the lows for the day before another bout of speculative buying saw new highs for the day being hit before the close. The HK ended 2 points lower at +20 while the KN lost 4 points ending at +9. In London the HK ending slightly lower at +6.30 as was the KQ ending the day at +5.40. The market continued to consolidate after hitting multi-year highs on Tuesday. The bulls will see it as a constructive close with the market readying itself for another test of the highs.
The market continues to be underpinned by lower global production with major drops expected in India and Thailand. Other major producers have also seen production levels drop including the USA. Unseasonal freezing weather hit their beet crop hard and has meant total sugar production is expected to drop from 7.20 million tonnes in 2018/19 to 6.85 million tonnes in the current 2019/20 season their lowest output for nine years. This has forced the USTR to reallocate unused quota for importing raw sugar. 78,071 tonnes of raw sugar has been reallocated which is likely to be imported from Dominican Republic, Brazil and Australia. It is likely the quotas will be adjusted further. US supplies have tightened further due to a drought in Mexico.
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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