8 March 2021

QCS Market Report February 2021


The volatility in sugar price action followed that of macro sentiment, commodities and equities. With very little fundamental news to hand, specs continue to push the market around following the macro environment. The recently expired March 21 contract settled at 17.53 USc/lb.

Green Pool Commodity Specialists released its latest trade flows, which predict a small move from surplus to deficit through until Q4 2021.

All eyes will be on Brazil to get us through the next eight to nine months until the southern hemisphere crushing begins again.


The reflation* story helped lift the Australian dollar to 24-month highs above USD 0.8000 over the past month, before being evaporated in all but two sessions.

Firming equities and commodity prices were the narratives driving USD weakness. Bond yields followed the same path as equities and commodities, though have been less talked about. A breakout of key new highs sent traders into a flurry and the Australian dollar lower.

Higher yields present a risk to economic growth and the recovery from COVID-19. Central banks such as the Reserve Bank of Australia have increased bond-buying programs in an attempt to offset this strength. 

It is not unreasonable to expect to see the Australian dollar move higher again, given the current outlook for the economic recovery and positive local news.

* Reflation is the act of stimulating the economy (by increasing money supply or by reducing taxes), seeking to bring it back up to the long-term trend after a dip in the business cycle.

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