The Mar–21 contract expired some weeks ago, with Wilmar the lone receiver of 890kt of sugar from the tape. Origins were mixed, but consisted mainly of sugar from Brazil. Since then, the new prompt May–21 contract has traded sideways in the 15.50–16.50 USc/lb range. Fundamentally, there have been very few new inputs for the sugar market other than crop updates from Thailand, India and Brazil. Brazil remains the key focus for sugar prices going forward, and trade flows suggest adequate supplies of sugar until we see Brazil come online. Until then, macro sentiment and influences will play a role in moving prices around.
After a rock-solid start to the new year, the AUD has pulled back nearly 4% of gains, which saw it trade above three-year highs at USD 0.80. Price action since then has underwhelmed, however, with rising treasury yields, a drop in equities and concerns about higher inflation keeping the market at bay. Exporters have had good opportunities to hedge as attempts to break USD 0.78 continue to be rejected with technical resistance and demand. Locally, the economic data flows and demand for natural resources continue to float the AUD and are key to providing forward guidance. Additionally, we expect optimism about successful vaccine rollouts and economic reopenings globally to support the AUD.