• QCS Market Report 5 December 2018 5 December 2018

    Sugar

    • Along with oil prices, sugar prices look to have stabilised in the last week.
    • Despite breaching a key 12.50 USc/lb level, sugar prices roared back toward 13 USc/lb later in the week.
    • With many of the northern hemisphere crops coming online now, much of the market’s attention will be focused there.

    Macro/currency commentary

    • A big week for the AUD, following comments from the US Fed, which prompted a rally back above USD 0.73.
    • The G20 summit held in South America over the weekend was highlighted by developments between China and the US on trade, with a 90-day window opened to see if they can come to an agreement on their differences.
    • Continued positivity on the trade front should continue to see the USD under pressure with the AUD likely to test USD 0.74.
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  • QCS Market Report 21 November 2018 21 November 2018

    Sugar

    • Raw sugar futures continued to slip over the past week, leading to another week of losses.
    • With the recent month’s activity, the market has been as lively as ever.
    • India now moves into its most active period, with exports tipped to kick off throughout the Australian summer.
    • Following the failed attempt to break 13 USc/lb, sugar now appears vulnerable to a move lower, depending on Indian exports, which could surprise to the upside.

    Macro/currency commentary

    • The AUD had another solid week, closing near the week’s high above USD 0.73.
    • Price action was mixed early in the week, with the AUD surging into higher ground from a stronger-than-expected local employment print.
    • Paired with weaker US yields and the broader USD, the AUD continued to trade positively.
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  • QCS Market Report 1 November 2018 1 November 2018

    Sugar

    • The recent surge in raw sugar prices stalled across the back end of the week, as weaker whites and sentiment weighed on the NY#11.
    • Price action was lively for the month of October as specs helped push prices from 11 to 14 USc/lb.
    • The macro environment remains volatile, with equities and stocks giving up the past 12 months’ worth of gains.
    • Giving back recent gains following the election results in Brazil, the real has followed sugar prices lower this week.

    Macro/currency commentary

    • A choppy week for the AUD, with numerous attempts above USD 0.71 being rejected.
    • There were some key data points this week as, local Q3 CPI was received on target.
    • Local trade balances today beat expectations, helping the AUD one per cent higher to USD 0.7145, at the time of writing.
    • As always, ongoing trade issues between the US and China are never far from mind.
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  • QCS Market Report 25 October 2018 25 October 2018

    Sugar

    • Sugar prices have continued to rally for almost four straight weeks.
    • As the Brazilian election plays out, a stronger real has seen ethanol parity at 16 USc/lb.
    • In India, question marks are being raised over exports and whether the 5mmt mandatory exports will be filled.

    Macro/currency commentary

    • Increased investor caution has seen the AUD chop lower over the last week.
    • Despite testing newer lows, the AUD closed the week at USD 0.71.
    • Local unemployment numbers highlighted the data calendar for the week, whilst the RBA minutes showed policy makers’ concerns about tighter lending standards.
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  • QCS Market Report 17 October 2018 17 October 2018

    Sugar

    • Several attempts to break 13 USc/lb did nothing to deter the market’s hunger for higher prices in the week.
    • The trade players met at the London Sugar conference last week, expressing mixed views on the current state of play.
    • Sugar remains difficult at present, with rising ethanol and a stronger Brazilian real bolstering ethanol parity, whilst the speculative market continues to get short into the market’s strength.

    Macro/currency commentary

    • US bond yields highlighted the week as the ten-year bonds posted seven-year highs at 3.26 per cent, reflecting the US economy and interest expectations.
    • While the market is now short, the bigger picture of US and China trade troubles looms.
    • Nothing is preventing the AUD from popping up on pockets of weakness in US data and trade concerns, however, it is difficult now to see the AUD above USD 0.73.
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  • QCS Market Report 2 October 2018 2 October 2018

    Sugar

    • The sugar market received confirmation this week of the long-expected Government subsidy for Indian farmers, with the announcement of a five-million-tonne export subsidy.
    • The market will sit tight as we wait for signs of the Indian export program kicking off.

    Macro/currency commentary

    • The AUD chopped into lower ground as the US FOMC meeting provided the only stimulus of significance for the week, with the FOMC raising rates on Thursday morning.
    • A busy week ahead for the economic data calendar, with the RBA meeting on Tuesday before we see local trade and retail sales data released later in the week.
    • US monthly, trade balance and non-farm payrolls print data will be released on Friday night.
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  • QCS Market Report 17 September 2018 17 September 2018

    Sugar

    • Consecutive weeks of gains were brought to an abrupt end last week, as prices took the elevator down on Friday.
    • Chatter around significantly larger Indian export subsidies saw the prices just shy of 50 points lower after the open.
    • The latest COT report released as expected, with specs reducing their net short position from 188,738 to 163,835 lots.
    • In the face of higher ethanol prices, the Brazilian real continues to weaken as further global trade discussions contain the emerging markets currency.

    Macro/currency commentary

    • It was a quiet start to the week for the AUD, oscillating around USD 0.71.
    • Thursday was the highlight of the local calendar, with the release of better-than-expected unemployment data. As a result, the AUD traded near the week’s high of USD 0.7229.
    • The AUD’s run was stunted on Friday night as the US rounded out the week with a strong non-farm payrolls print, and it closed the week near USD 0.7150.
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  • QCS Market Report 13 September 2018 13 September 2018

    Sugar

    • Sugar producers across the market have enjoyed the recent lift in sugar prices over the past two weeks. After trading at prompt life-of-contract lows, the soon-to-expire October18 contract staged a rally, seeing it above 11 USc/lb.
    • In India, the government is yet to provide an export policy, but in an election year, it seems inevitable it will do all it can to incentivise exports.
    • Friday night’s Commitment of Traders (COT) report stunned many as the specs moved to a record 188,738 lots net short.

    Macro/currency commentary

    • A bumpy ride for the AUD over the past week, oscillating through USD 0.7160–0.7230.
    • The RBA met on Tuesday, leaving rates on hold as expected. The accompanying statement (which was the main focus for most) maintained a neutral stance, without mentioning the highly publicised independent rate increases passed on by local banks
    • The AUD opened higher on Friday, before gains were pared back on firming US data on Friday night.
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  • QCS Market Report 9 August 2018 9 August 2018

    Sugar

    • The global surplus remains at the forefront for the sugar market.
    • There is potential to see the lower end of 10.50 USc/lb, but at what point do we bounce?
    • Ethanol parity is seemingly capping the market out at 12 cents.
    • Risk, as has been the case for the majority of this year, remains to the downside.

    Macro/currency commentary

    • Despite the trade war being played out by the US and China, the AUD keeps bouncing off USD 0.7350.
    • There remains no good new news for the AUD, as it gyrates in the USD 0.7350–0.7450 range.
    • Domestic data more recently has been positive, with the RBA keeping rates on hold this week.
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  • QCS Market Report 31 July 2018 31 July 2018

    Sugar

    • Again, there appears to be no good news about the market this week.
    • This week we saw spreads weaken—most notably, October/March—and Thai premiums soften, given an uptick in exports.
    • Brazil’s harvest slowed as more mills shut, favouring ethanol over sugar.

    Macro/currency commentary

    • It was more of the same for currency markets last week, as the AUD continued to spin its wheels.
    • Despite small losses on the week, the AUD managed to hold a USD 0.74 handle.
    • Looking ahead, the data calendar fires up again this week, with local and international data scheduled for release.
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