Mumbai, 14 Jan (Commoditiescontrol): The latest Commitment of Traders (COT) report for Sugar No. 11, released on January 7, 2025, reveals critical changes in trader positioning that could shape the global sugar market's near-term outlook.
Managed Money, the key speculative force in the market, maintained a net long position of 47,462 contracts, reflecting a bullish stance. However, a closer look at the report highlights a potential shift in sentiment. Managed Money increased their spreading positions significantly, up by 6,504 contracts this week, while net changes in long (+321) and short (-579) positions remained modest. This shift in positioning suggests a cautious approach as market fundamentals evolve.
The report also indicates a decline in overall open interest, down by 9,255 contracts, signaling reduced market activity or position liquidation. Notably, Producer/Merchant participants held a strong net short position of 73,972 contracts, aligning with expectations of price pressures amid rising global sugar supply.
The earlier bullish sentiment, driven by anticipated production declines in India and Brazil, appears to be waning. Expectations of improved output in Brazil and Thailand, combined with increased restrictions on liquid sugar shipments to China, are raising concerns about a potential oversupply in the global market. These developments could prompt aggressive unwinding by Managed Money, further pressuring sugar prices downward.
With no significant changes in the number of traders across categories, the report underscores growing uncertainty among speculative traders. The rising global sugar availability and evolving trade dynamics are expected to test the sustainability of Managed Money's long positions in the weeks ahead.
This CFTC data highlights a potential turning point in market sentiment, emphasizing the need for traders and stakeholders to monitor speculative activity and global production trends closely. The sugar market may face increased bearish momentum if Managed Money begins to unwind positions in response to these supply-side pressures.
(By Commoditiescontrol Bureau; +91-9820130172)