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Weekly Market Report 30 April 2015 30 April 2015
GLOBAL MACRO UPDATE The global markets are moving in between conflicting forces. On the one hand Q1 US GDP printed a very low 0.2%, yet the FOMC is expecting growth to bounce back and has left the door open for hikes later this year. The market has taken a lot of the hikes out that had previously been priced in and this has had flow on effects to various asset markets. Rates across the globe have moved higher. Equities have moved lower, which would generally be USD supportive, but instead the big dollar has sold ...Read full article -
Weekly Market Report 12 May 2015 12 May 2015
BRAZIL UPDATE — WHAT TO EXPECT The Brazilian campaign has begun with the usual favouring of ethanol. The market completely overestimated the effect of the drought last season with (realistic) estimates of a crop as low as 540 mmt giving way to the reality of ~575 mmt. This season the market is calling for slightly higher at ~585 mmt, remembering at full swing Brazil can crush around 2.5mmt per day. Given the abundant rain this season, we are fully expecting the crop to be large, even surpassing market estimates...Read full article -
Weekly Market Report 26 May 2015 26 May 2015
AUSTRALIAN INTEREST RATES , AUD/USD … WHAT NEXT The Reserve Bank of Australia lowered the overnight cash rate to an all time low of 2% at the May board meeting. The bank has found itself in a difficult position with the terms of trade (the price of goods we export such as iron ore) falling, but offsetting that has been the property bubble of Sydney and a lesser extent Melbourne. Sydney accounts for 20% of the Australian market so it does bode for concern for the bank. Rather than the government using record low...Read full article -
Weekly Market Report 2 June 2015 2 June 2015
SUGAR UPDATE July Sugar made life-of-contract lows (just) at the end last week falling below 12c, although has failed to stay under that level, rallying back to 12.30 on Monday night. At the end of trading last week the Commitment of Traders (CoT) report was released showing the specs had turned from a small long position into a medium-sized short in the space of a week. Lower volumes and lack of producer interest suggests this group of investors was the majority of the selling last week. It is hard to see signifi...Read full article -
Weekly Market Report 24 June 2015 24 June 2015
SUGAR UPDATE Sugar remains in a state of flux, waiting for a clarity over a number of factors which can only be resolved through time. Producers are continuing to sit at and above the market in the hope of better prices to lock in, commercial buyers are sitting at or below the market, bringing forward demand to capture lower prices. The current swing factor has been the spec position, which has turned a small long at 13.60 into a large short position in the low 11c. Following the release of the Commitment of Trade...Read full article -
Weekly Market Report 8 July 2015 8 July 2015
SUGAR UPDATE Sugar continues to trade at the lower end of the longer term recent ranges, although a technical squeeze off contract lows has followed a one-year severe downtrend. The market is trying become more bullish, arguing large rainfall in Brazil will hamper harvesting and drought in Thailand will hamper additional cane acreage. Volumes have been low for the last couple of weeks with producers standing aside waiting for better levels given the length of time to the October expiry and buyers not being in ...Read full article -
Weekly Market Report 6 November 2015 6 November 2015
SUGAR UPDATE The dynamics of the sugar market have done a complete about face since the end of September. The market is up seven weeks in a row, with spot prices now sitting mid 15 cents. Whilst the macro background has certainly become more positive, most recent price action is more indicative of traders’ positions being squeezed out rather than a belief that we are back on the way to 20c. The bullish arguments are, rain in Brazil will interrupt the harvest, Chinese, Thai and Indian production will all be lo...Read full article -
Weekly Market Report 17 November 2015 17 November 2015
SUGAR UPDATE The sugar market seems (once again) to be trapped in a range. This time however the range is significantly higher than the lows and there are reasons to suggest we may continue to move higher. The new range is 13.70 to 15.50 with end users seen buying before 14c and producers selling over 15.25. Like most other times there are competing forces. On the bullish side, rain is threatening to hamper what remains of the Brazilian crop. Sugar production seems set to end around 30.5mmt down from earlier es ma...Read full article -
Weekly Market Report 1 December 2015 1 December 2015
SUGAR UPDATE The sugar market spent the month of November trapped sideways significantly off the September lows. The market is grappling with opposing forces as spoken of previously (dryness in many production areas and too much rainfall in Brazil against an Indian subsidy which may release 2–2.5mmt (but up to 3.2mmt) on the world export market, plugging most of the perceived production deficit for next year. Technically the fact the market has been unable to sell off through 14c bodes well for an eventual ...Read full article -
Weekly Market Report 26 February 2016 26 February 2016
SUGAR UPDATE The action of the fund/speculative community has been the key driver of the sugar market at different times, and has been the especially the case recently. The large push from the Sept lows to Dec highs was a reversal of a large short position into a large long position. A deteriorating macro environment (oil under pressure, China worries, Japan going to negative rates) halted the push higher and left these longs vulnerable. The sell off through Jan ended with the specs being close to zero, although...Read full article