- The prompt March21 raw sugar futures contract settled during the month at an average rate of 15 USc/lb.
- A few tests of 15.50 USc/lb failed to kick on, as a 15 USc/lb floor looked stable.
- On the fundamental side, India continued to hold most of the market’s attention. Subsidised or not, it is expected that India will export sugar to support tighter global trade flows through 1H 2021.
- A strong month for the AUD, with trading ranging from a USD 0.6991 low to a high of USD 0.7373 toward the end of the month.
- The US Presidential election came and went — complete with the expected fireworks. While a clear win for Democratic candidate Joe Biden, it was not the landslide predicted by most polls.
- Market attention moved back to COVID-19, as Moderna and Pfizer registered successful trials of vaccines and Oxford University announced a successful trial of a vaccine developed in conjunction with AstraZeneca.
- The RBA cut interest rates to 0.1% as widely expected, with the commentary clearly underlining a lack of intent to move to negative interest rates unless widely adopted in other parts of the world.
- Raw sugar futures chopped higher over the past month as the Mar–21 contract achieved life-of-contract highs at 16.75 USc/lb off the back of US dollar weakness.
- Fundamental news remained quiet following India’s export subsidy announcement in December. At least two million tonnes has been contracted for Indonesia, while Indian millers will continue to seek out homes for the remainder of the proposed five million tonnes of exports.
- Thailand’s crush is lagging behind the same period last year, as anticipated by the market.
- From a fundamental perspective, all eyes will be on the Brazil crop in the coming months.
- The AUD has been well supported in the last month by a weakening USD, and has seen fresh 33-month highs at USD 0.7816.
- Ever-increasing COVID-19 numbers and political unrest have weighed heavily on the US dollar and economy.
- Investors have moved money from the typical safe havens of the USD and gold, towards ‘riskier’ assets such as the US equity market and AUD.
- The volatility in sugar price action followed that of macro sentiment, commodities and equities.
- With very little fundamental news to hand, specs continue to push the market around following the macro environment.
- The recently expired March 21 contract settled at 17.53 USc/lb.
- Green Pool Commodity Specialists’ latest trade flows predict a small move from surplus to deficit through until Q4 2021.
- The reflation story helped lift the AUD to 24-month highs above USD 0.80 over the past month, before being evaporated in all but two sessions.
- Firming equities and commodity prices were the narratives driving USD weakness.
- Bond yields followed the same path as equities and commodities, though have been less talked about.
- A breakout of key new highs sent traders into a flurry and the AUD lower.
- The AUD may move higher again, given the current outlook for the economic recovery and positive local news.
During the COVID-19 pandemic, QCS is closely monitoring global sugar and currency markets and preparing for a number of possibilities in the pricing and marketing space. We are updating QCS growers by email twice a week, but should you have any questions or concerns your first point of contact is QCS Grower Services Officer Arthur Douglas. You can contact Arthur on 0447 534 791 or via email. If he can’t answer your questions on the spot, Arthur will get back to you as soon as we have an answer. If you ma...Read full article
QCS’ offices will be closed for a short break over the Christmas and New Year period, with the Brisbane and Farleigh offices closed from Monday 23 December 2019 and reopening on Monday 6 January 2020. The QCS team is grateful so many of you have chosen QCS as your GEI marketer and we look forward to working with you again in 2020. We wish everyone a safe and happy Christmas and New Year. Over the break, you can still reach a member of the QCS team on 1800 774 246 or by emailing . 2 Decembe...Read full article
- A relatively quiet month for raw sugar futures, with the prompt March20 contract trading in a 12–13 USc/lb range following the October19 contract expiry.
- Trade flows remain balanced in the near term, with many analysts expecting a global deficit from Q2 2020 and beyond.
- Near-record short spec positions have also helped keep prices afloat above 12 USc/lb.
- While there is support for prices at current levels, large stockpiles in India and China are keeping the market at bay.
- A recovery in the AUD was short lived as local issues outweighed weakness in the USD
- Trade uncertainty continues to weigh on the AUD.
- The RBA remains in play, with the latest meeting minutes indicating a case could be made to reduce interest rates.
Following the 2020 Season GEI nomination deadline of 31 October, QCS is welcoming back a number of growers who nominated QSL as their 2019 Season marketer, but have returned to QCS for the 2020 Season. Growers coming back to QCS have told us that our straightforward and flexible marketing offer, which continues to provide some of the best returns available to Australian growers, has been key to their decision. Growers have also let us know that another important reason for returning to QCS is our strong loca...Read full article
- Raw sugar futures rallied in the run up to the October 19 expiry and continued to strengthen afterwards, before losing momentum and giving back two weeks’ worth of gains.
- Prices have traded freely with the October 19 contract off the board
- Indian sugar is still expected to hit the global market through Q1–Q2 2020, however prices will need to move back into the 13–14 USc/lb range to incentivise exports from the region.
- An uninspiring month for the AUD, which gave up prior gains that had seen the dollar climb back up to USD 0.69.
- The RBA continued to ratchet up easing expectations by cutting interest rates to a record 0.75%.
- Looking ahead, US and China trade discussions remain at the forefront of AUD drivers in the near term.
The first direct export sale in Mackay Sugar’s history shipped in September, with 24,000 mt of raw sugar leaving for Japan aboard the MV Crystal Island. The MV Crystal Island left the Port of Mackay on 18 September and arrived in Japan in early October. Thanks to new marketing arrangements, the direct sale means that costs previously associated with transferring export sugar through QSL or its predecessors are no longer paid, putting more money into growers’ pockets. In the current environment of low w...Read full article
- Raw sugar futures have drifted lower over the past month as the excess global supply of raw sugar weighs further on prices.
- Prompt October19 contract succumbed to the pressures, making life of contract lows below 11 USc/lb.
- With the market well supplied through Q4 2019, analysts are predicting Indian exports will hit the global market through the first half of 2020.
- A generally positive month for the AUD, trading back toward USD 0.69 on a weaker USD and sentiment around the ongoing trade discussions.
- With US/China trade talks set to resume next month, not many believe this discussion will provide any relief to the struggles of the US economy.
- Locally, the RBA looks on track to cut rates again in 2019. Q2 GDP results and the latest employment figures (further weakness in the labour market) were well below the RBA’s forecast figures.