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Weekly Market Report 25 July 2018
Sugar: The trading week opened with a bang, raw sugar futures erasing life of contract lows seen in the previous sessions. Some technical adjusting, the market’s reaction to bearish news in China and India was unexpected. A refusal of the 10-cent handle buoying sugar prices back into the 11 – 12.50 range. Still, there is no good news around - China revoke import duty exemptions as trade war pressures mount, India likely to raise their FRP for cane and divergence in the white’s market suggesting tightness in ...Read full article -
QCS Market Report 17 July 2018 17 July 2018
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- Raw sugar futures were lower across the board this week, with the prompt October18 contract finishing the week below 11 USc/lb.
- Price action was largely one directional all week as ‘no news’ has been perceived as a reason to continue to sell.
- The numerous Thai and Brazilian producers with substantial hedging left to complete will limit any bounce, as the market gyrates in the 11–13 USc/lb range.
Macro/currency commentary
- Trade wars were back into the fray in a bigger and nastier manner last week, with investors becoming more risk averse about the potential effects of a trade war.
- AUD price action heated up on Wednesday after headlines claimed the US would impose additional tariffs on Chinese imports, sending the AUD sliding to 14-month lows at USD 0.7361.
- In the week ahead, the RBA July meeting minutes are due out, with important employment data released on Thursday.
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Weekly Market Report 10 July 2018
Sugar: Despite a shortened trading week, raw sugar futures slipped lower from Monday through to the US Independence Day holiday before stabilising near 11.50 to round out the week. Declining ethanol prices and a weaker Brazilian Real helped lead sugar prices lower. The Indian Government alluded to stronger export policies for mills were coming. The latest Commitment of Traders report was delayed due to the US holiday - the markets expects the non-index to have continue to add to their net short position further as...Read full article -
Weekly Market Report 20 June 2018 20 June 2018
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- Raw sugar futures struggled to hold in the face of persistent downward pressures around anticipated output in major producing regions
- A considerably weaker Brazilian real afforded producers an opportunity to do some pricing.
- Looking ahead, there is mention of a potential El Nino weather event, although Thai and Indian crops are unlikely to be disrupted, given timing.
Macro/currency commentary
- Despite a disruptive weekend following the G7 summit in Quebec, currencies started the week relatively quietly.
- As expected, the US Fed lifted rates another 25 bps, signalling that another two hikes in 2018 are likely.
- The AUD moved lower in response to the central bank’s statement and has continued to slide since.
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Weekly Market Report 13 June 2018 13 June 2018
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- Large swings either side of 12 USc/lb are the norm in this week’s daily sugar chart.
- Raw sugar futures seesawed on a weaker Brazilian real, allowing for heavy producer selling to be absorbed by fund buying.
- The Indian Government announced its relief package for the struggling local sugar market.
Currency/macro commentary
- Topside momentum for the AUD stalled last week above USD 0.7675.
- The RBA left interest rates on hold as expected, which saw the AUD briefly below USD 0.7600.
- US President Trump has declared the US-North Korea summit a success, and that it has led to a ‘secured commitment for denuclearisation’.
- The USD has performed well since, with CPI data releasing in line with expectations.
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Weekly Market Report 4 June 2018 4 June 2018
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- A three-week recovery in raw sugar futures was stopped in its tracks on Friday night, retracing any headway made in the previous weeks.
- Newswires were highlighted by the resignation of Brazil’s Petrobras CEO, and fears of a return to a fixed-price gas agreement helped drive sugar prices lower.
- With large selling pressure above 13 USc/lb, news of rain and an end to the truckers’ strike did little to help sugar markets’ fortunes.
Currency/macro commentary
- Seesawing price action saw the AUD slide below USD 0.7500 mid-week, before rebounding back above USD 0.75.
- Positive price action was capped as the monthly US Non-Farm Payrolls data beat expectations on Friday night, with US stocks, treasury yields and the big dollar all higher.
- A busy week ahead on the economic data calendar, with the RBA meeting on Tuesday expected to leave rates on hold, with little change to the accompanying commentary.
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Weekly Market Report 28 May 2018 28 May 2018
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- There have been positive signs for raw sugar futures in the past two weeks, with price action showing consecutive gains across the fortnight.
- The latest Commitment of Traders report continues to see a reduction of the net short position.
- Potential Indian stockpiles and weather in CS Brazil will hold much of the market’s attention.
Macro/currency commentary
- The AUD has consolidated from USD 0.7800–0.7450 over the past month, to the delight of exporters.
- US ten-year yields have dipped below the key 3% level, which should help sustain the AUD around USD 0.7550 in the near term.
- Friday’s release of US Non-Farm Payrolls data will be the highlight of this week’s calendar, with no key local data due out.
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Weekly Market Report 14 May 2018 14 May 2018
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- New York sugar week was dominated by discussions around dry weather in Brazil and global trade surpluses over the coming seasons.
- Raw sugar prices reacted by erasing gains made in the week before.
- The latest Commitment of Traders report shows a reduction in net short spec positioning to 150,500 lots from 161,500 lots in the prior week.
Macro/currency commentary
- A tough week for the AUD, which made fresh 11-month lows at USD 0.7413 before closing the week back above USD 0.75.
- In the week ahead, the local calendar is busy, and US and China retail sales figures are due on Tuesday, with both expected to be slightly weaker than previous.
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Weekly Market Report 9 May 2018 9 May 2018
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- The recent freefall took a break last week as sugar prices found some support below 10 USc/lb.
- The new prompt, Jul18, traded higher though eventually settled the week in arrears.
- India is one step closer on subsidies, announcing a subsidy worth 55 INR per tonne.
Macro/currency commentary
- The AUD remained under pressure this week whilst US yields retreated below 3%.
- The RBA highlighted higher-than-expected forecasts for inflation and a miss in the latest Non-Farm Payrolls data last Friday night.
- Trade tensions continue to weigh heavily on the AUD, with Trump announcing overnight that the US will withdraw from the 2015 Iran nuclear deal.
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Weekly Market Report 27 April 2018 27 April 2018
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- Excluding the most recent trading session, raw sugar futures have continued to slump with the soon-to-expire May18 contract settling at 10.86 USc/lb, with July not too far ahead.
- This week, the 1H April UNICA report continues to see more ethanol being produced in Brazil.
- In India, the export subsidy parade remains in play with the government telling mills they must export.
Macro/currency commentary
- The AUD has weakened dramatically this week, as rising US treasury yields propped up the USD.
- Falling from a one-month high above USD 0.78, the AUD has slid in consecutive sessions to a USD 0.7547 low on 27 April.
- Paired with weaker local data, there has been little reason to suggest the AUD may draw back recent losses.