• Weekly Market Report 28 May 2018

    Sugar

    • 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

    Sugar

    • 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

    Sugar

    • 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

    Sugar

    • 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.
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  • Weekly Market Report 17 April 2018

    Sugar

    • An eventful week for sugar as the market saw new life-of-contract lows across the board.
    • The fundamental outlook remains unchanged.
    • Looking ahead, Indian export programs and potential subsidy announcements will be key drivers.

    Macro/currency commentary

    • The AUD maintained a USD 0.7750 handle over the week, despite a look above USD 0.78 on Friday.
    • Easing trade tensions between the US and China supported the AUD.
    • Data and speakers gave mixed messages this week, as consumer confidence released below expectations but RBA Governor Lowe maintained the status quo.
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  • Weekly Market Report 9 April 2018

    Sugar

    • Raw sugar futures have been highlighted by spread price action with the index fund roll kicking off on Friday.
    • Concerns over Q2 tradeflow tightness appear to be the most prominent explanation for the recent pick up in activity.
    • It is well publicised that the Indian crop will be much bigger than initially expected. Milling bodies and the government will contest the size of export subsidies in coming weeks.

    Macro/currency commentary

    • Attempts to get a handle on USD 0.77 failed this week, as the AUD finished the week in the red.
    • The RBA left rates on hold, with accompanying commentary noting that, despite an improving labour market, wages growth remains low and this is likely to continue for a while yet.
    • The AUD struggled to maintain upward momentum, finishing back below USD 0.7700.
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