Hey jimbo,
It's very probable that your blood sugar is going down, then up, then down, then up while cycling.
That's what mine does... It moves about 3 full points down, then my liver dumps glucose in and it goes 3 points up, etc...
So the timing may have something to do with it - it's possible you're reading it when it's back up.
Also, for many of us vigorous exercise will up our blood glucose - if you're not used to the 10km ride, your body could be spiking it as a "fight or flight" response. In this case the key for many diabetics is to KEEP GOING, but at a slightly lower intensity, and to cool-down well at the end of your ride, so you're not stopping while huffing/puffing...
A combination of low-carb dieting, adding medications prescribed by your Dr., and daily exercise WILL help with both insulin-resistance and blood glucose control. But it can take time.
It took me about 2-3 weeks to start seeing decent results, and I went VERY low-carb and VERY exercise-heavy in addition to the metformin my Dr. prescribed.