Raw sugar futures looked likely to retrace all recent gains on a material reduction (20,000 lots) in the net short spec position , but prices regained prior week losses to finish back above 15 USc/lb.
The Indian harvest is underway with some estimates already being ratcheted higher to around 26 million tons.
Currency/macro comments
AUD was buoyed back above USD 0.76 by uncertainty around the Fed’s inflation forecasts.
US Fed concerns that inflation may remain lower for longer saw the USD and yields slip.
Raw sugar futures have enjoyed consecutive gains on the week, with the prompt March18 surging from 14.23 USc/lb on Monday to settle near 14.99 USc/lb on Friday night.
Global surplus and tightness concerns were moderated as the potential for less sugar in Brazil held participants’ attention.
Currency/macro comments
A quietly choppy week for the AUD, sitting in a 74-point range.
Downside pressure was relieved as plans for US tax reform stalled, allowing the AUD to hold back above USD 0.7650.
Raw sugar futures struggled to garner further support following a run above 14.50 USc/lb last week, with the March18 contract settling the week 25 points in the red.
Looking ahead, with little new fundamental news, we expect the market to continue to cycle well-trod ground in the 13-15 USc/lb range.
Currency/macro commentary
AUD ended slightly lower for the week, as a softer retail sales print gave back mid-week gains.
In the US, the FOMC left rates on hold as expected, maintaining they are on track for a December rate hike.
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