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The market ended at the top end of the range for the month on Friday but it was another quiet, range-bound day as traders continued to remain generally side-lined. The market had opened 3-5 points firmer and held these gains for the morning. However, interest during the first half of the day was virtually non-existent. However, as the US started to get to their desks values did improve pushing up to the highs of the day but, again, running into rather heavier selling just shy of 11.00 cents. This triggered a bout of speculative long liquidation which saw prices drop nearly 30 points and took prices to the lows and into the negative column where they remained for the next couple of hours. However, prices did improve by the close settling some 10 points better although the trading volume remained thin throughout the session. The NV improved 5 points to end at -6 while the VH finished virtually unchanged at -67. In London the front spread lost ground again as profit taking continued. The QV slipped almost $2 to settle at +16.20 while the VZ ended a tad firmer at +7.70. This put the QN WP slightly weaker again at 121.50 and the VV WP a tad firmer at 104.00. The market continues to remain range bound. During last week the market dropped back from over 11 cents but found good support at 10.50.
The COT report as of the 26th May showed that the funds/specs now have a net long positions of 5,612. This is due to the fact the non-commercials cut their net short again by 18,313 to just 5,381 on a mixture of short covering and fresh buying. There still appears little appetite for the larger, long term funds to get actively involved but an improving macro picture may change this view before long. The commercials increased their net short position by 18,426 to 223,116 on producer pricing and some limited end-user pricing suggesting that Brazilian mills see prices above 11 cents as attractive with weak BRL and limited ethanol demand. The Index funds increased their net long position by 2,307 to 217,554.
In the Indian state of Uttar Pradesh sugar production has hit a new record of 12.503 million tonnes of sugar as of the 28th May. This is despite a two month lockdown and suggests India’s total sugar production may creep over 27 million tonnes by the close of the season. This suggests that next season Indian sugar production could bounce back to close to the record 32.5 million tonnes produced in 2018/19 assuming the just-starting monsoon is normal.
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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ADM Investor Services International Limited is authorised and regulated by the Financial Conduct Authority and a member of the London Stock Exchange.