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QCS Market Report 17 July 2019 17 July 2019
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- There was a record July19 contract expiry delivery, as a remarkable 2.1 mmt of sugar was delivered to the tape.
- Brazilian mills continue to minimise sugar output as demand for ethanol and firm US corn prices support ethanol prices.
- The Indian Government is set to approve another tranche of 5mmt of exports, with weather being the key driver for the region.
Macro/currency commentary
- A weaker USD in the face of an impending historical US interest rate cut by the US Federal Reserve has seen the AUD bounce back above USD 0.70.
- RBA July meeting minutes are due out this week with the market looking for hints around the timing of another interest rate cut at home.
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QCS Market Report 15 May 2019 15 May 2019
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- It was a turbulent week for raw sugar futures ahead of the annual New York sugar week, with heavy fund selling leading the market into the abyss.
- Following last week’s negative price action, the market appears to have stabilised at technical support levels near 11.70 USc/lb.
- As a bounce back above 12 USc/lb looms, large Thai producer pricing likely sits above 12.50 USc/lb, capping too much optimism.
Macro/currency commentary
- The AUD capped off a big week below USD 0.70. The local unit remained under pressure, with strong US data and no policy change from the RBA.
- Looking ahead, markets will remain cautious as the trade war continues to swing prices around, based on rhetoric.
- Thursday sees the local employment report for April, which will be key for the RBA’s meeting next month.
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QCS Market Report 12 April 2019 12 April 2019
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- Despite the large producer selling hanging over the market, sugar prices have continued to attempt to press forward.
- Fundamentally, both supply and demand variables will keep sugar in its current range.
- Weather in Brazil and India remains a game changer, with a likely advance into the 12–13 USc/lb range.
Macro/currency commentary
- The AUD traded comfortably above USD 0.71 this week.
- Supported by positive economic data, elevated natural gas, iron ore and coal prices, the AUD looks set to break out of its recent USD 0.70–0.72 range.
- The economic data calendar will be important over the coming months, as the market looks for signs to signal a rate cut.
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QCS Market Report 29 March 2019 29 March 2019
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- Raw sugar futures have had a mixed week, with the prompt May19 contract hovering around 12.50 USc/lb heading into the last session of the week.
- Price action was highlighted by a small technical bounce toward 12.75 USc/lb before overhanging producer pricing put the brakes on a further advance.
- Thai estimates continue to come in around 14 mmt.
Macro/currency commentary
- A challenge of recent technical resistance levels for the AUD was exacerbated by commentary from a more dovish RBNZ on Wednesday morning.
- The RBNZ joined the choir of central banks around the globe preaching an easing bias toward rates.
- Despite some easing near USD 0.7150, the AUD was slapped back below USD 0.71.
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QCS Market Report 22 March 2019 22 March 2019
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- Last week’s Commitment of Traders (COT) report surprised somewhat, with non-index specs showing a net short 126,000 lots, slightly more than anticipated.
- Despite the positive backdrop for prices, led by non-index specs, the rest of the week has seen the market erode much of those prior gains.
- Softening physicals and white premiums have pushed more producer pricing into raws.
Macro/currency commentary
- Local unemployment data gave the AUD a leg up to fresh one-month highs at USD 0.7168, but gains were short lived as the USD clawed back losses on the back of some second-tier jobs data.
- As the week draws to a close, the AUD looks set to close on a 71-cent handle.
- The AUD continues to gravitate around USD 0.71, despite positive local employment numbers.
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QCS Market Report 6 March 2019 6 March 2019
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- Raw sugar futures continued to slump as the new prompt May19 contract finished the week down 5.1%.
- The Indian Government raised the domestic price of sugar just over a week ago, as the mills’ cries for assistance seem to have been answered. Cane farmers arrears continued to grow, prompting further assistance from the government.
- It is yet to be seen whether the subsidies will continue to encourage farmers to grow cane, despite the uncertainty of payments.
Macro/currency commentary
- The AUD struggled to slow USD momentum over the back of last week, closing the week below USD 0.71.
- Newswires were highlighted by US President Trump extending the tariff deadline with China, whilst reports out of the UK suggested Prime Minister Theresa May was planning to delay Brexit to delay a no-deal scenario.
- A quiet start to the current week as the AUD was back above USD 0.71. Comments from US President Trump, suggesting the USD is too high, helped the AUD start on a positive note.
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QCS Market Report 14 February 2019 14 February 2019
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- Despite a relief rally erasing the previous day’s losses, raw sugar futures were subdued last week.
- In India, harvesting continues to push along well, however, exports have stalled whilst mills await direction on Government subsidies.
- Similarly, the Thai harvest is progressing well, thanks to better yields and operational mills.
- With the annual Dubai Sugar Conference now complete, in the coming days we will start to see reports of points of interest.
Macro/currency commentary
- The AUD was on the back foot last week, despite a change in rhetoric from the RBA.
- The AUD continues to gyrate above and below USD 0.71 this week.
- A handful of US and Chinese economic data is due tonight and tomorrow to round out the week.
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QCS Market Report 30 January 2019 30 January 2019
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- A shortened trading week did little to suppress price action last week.
- In India, millers remain positive that the Government will come to their aid in the form of higher domestic prices.
- In the week ahead, we will continue to monitor the situation between Indian mills and the Government.
Macro/currency commentary
- Much like sugar, the AUD had a weak end to the week, finishing back below USD 0.71.
- Headlines have continued to be highlighted by trade discussions, concerns over global growth and geopolitical risks.
- Despite a better-than-expected local jobs report, the AUD remained under pressure as global macro risks persist.
- A busy week ahead on the economic data calendar.
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QCS Market Report 16 January 2019 16 January 2019
Read full article- Sugar prices rebounded further into higher territory over the past week.
- The US Federal shutdown stopped the weekly Commitment of Traders report, however, respected market analysts presume specs sit at a comfortable net short position.
- Many are still assuming Indian production will underwhelm, which may prove to be incorrect. We will be carefully monitoring Indian production and exports, until we see further developments on levies.
Macro/currency commentary
- Another strong week for the AUD, pushing back toward USD 0.72, with the US Fed’s reluctance to hike rates in the near-to-medium term.
- Many still expect the Fed to hike twice in 2019, however, no change is expected until the second half of the year.
- Global trade risk sentiment began to build positively over the weekend—Chinese economic officials are expected to progress with discussions in Washington next month.
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QCS Market Report 17 December 2018 17 December 2018
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- Still not much new news about for sugar.
- Price action was highlighted by a weaker opening, but closed unchanged on Thursday night, remaining largely in line with oil and outside markets.
- Harvesting conditions in India have been favourable to date—some reputable market intelligence sources are now revising their 2018–19 estimates higher on a better-than-expected Indian crop.
Macro/currency commentary
- A disappointing end to the week for the AUD, struggling to hold a USD 0.72 handle on Friday night, thanks mostly to weaker Chinese economic data and heightened concerns for global growth.
- Looking ahead, this week’s economic data calendar is full of excitement and announcements.
- The US calendar is highlighted by the FOMC rate announcement on Thursday morning, with the market pricing a 75 per cent chance of a 25 basis-point rate hike on Thursday.