• QCS Market Report 16 January 2019 16 January 2019

    • Sugar prices rebounded further into higher territory over the past week.
    • The US Federal shutdown stopped the weekly Commitment of Traders report, however, respected market analysts presume specs sit at a comfortable net short position.
    • Many are still assuming Indian production will underwhelm, which may prove to be incorrect. We will be carefully monitoring Indian production and exports, until we see further developments on levies.

    Macro/currency commentary

    • Another strong week for the AUD, pushing back toward USD 0.72, with the US Fed’s reluctance to hike rates in the near-to-medium term.
    • Many still expect the Fed to hike twice in 2019, however, no change is expected until the second half of the year.
    • Global trade risk sentiment began to build positively over the weekend—Chinese economic officials are expected to progress with discussions in Washington next month.
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  • QCS Market Report 17 December 2018 17 December 2018

    Sugar

    • Still not much new news about for sugar.
    • Price action was highlighted by a weaker opening, but closed unchanged on Thursday night, remaining largely in line with oil and outside markets.
    • Harvesting conditions in India have been favourable to date—some reputable market intelligence sources are now revising their 2018–19 estimates higher on a better-than-expected Indian crop.

    Macro/currency commentary

    • A disappointing end to the week for the AUD, struggling to hold a USD 0.72 handle on Friday night, thanks mostly to weaker Chinese economic data and heightened concerns for global growth.
    • Looking ahead, this week’s economic data calendar is full of excitement and announcements.
    • The US calendar is highlighted by the FOMC rate announcement on Thursday morning, with the market pricing a 75 per cent chance of a 25 basis-point rate hike on Thursday.
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  • QCS Market Report 5 December 2018 5 December 2018

    Sugar

    • Along with oil prices, sugar prices look to have stabilised in the last week.
    • Despite breaching a key 12.50 USc/lb level, sugar prices roared back toward 13 USc/lb later in the week.
    • With many of the northern hemisphere crops coming online now, much of the market’s attention will be focused there.

    Macro/currency commentary

    • A big week for the AUD, following comments from the US Fed, which prompted a rally back above USD 0.73.
    • The G20 summit held in South America over the weekend was highlighted by developments between China and the US on trade, with a 90-day window opened to see if they can come to an agreement on their differences.
    • Continued positivity on the trade front should continue to see the USD under pressure with the AUD likely to test USD 0.74.
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  • QCS Market Report 21 November 2018 21 November 2018

    Sugar

    • Raw sugar futures continued to slip over the past week, leading to another week of losses.
    • With the recent month’s activity, the market has been as lively as ever.
    • India now moves into its most active period, with exports tipped to kick off throughout the Australian summer.
    • Following the failed attempt to break 13 USc/lb, sugar now appears vulnerable to a move lower, depending on Indian exports, which could surprise to the upside.

    Macro/currency commentary

    • The AUD had another solid week, closing near the week’s high above USD 0.73.
    • Price action was mixed early in the week, with the AUD surging into higher ground from a stronger-than-expected local employment print.
    • Paired with weaker US yields and the broader USD, the AUD continued to trade positively.
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  • QCS Market Report 1 November 2018 1 November 2018

    Sugar

    • The recent surge in raw sugar prices stalled across the back end of the week, as weaker whites and sentiment weighed on the NY#11.
    • Price action was lively for the month of October as specs helped push prices from 11 to 14 USc/lb.
    • The macro environment remains volatile, with equities and stocks giving up the past 12 months’ worth of gains.
    • Giving back recent gains following the election results in Brazil, the real has followed sugar prices lower this week.

    Macro/currency commentary

    • A choppy week for the AUD, with numerous attempts above USD 0.71 being rejected.
    • There were some key data points this week as, local Q3 CPI was received on target.
    • Local trade balances today beat expectations, helping the AUD one per cent higher to USD 0.7145, at the time of writing.
    • As always, ongoing trade issues between the US and China are never far from mind.
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  • QCS Market Report 25 October 2018 25 October 2018

    Sugar

    • Sugar prices have continued to rally for almost four straight weeks.
    • As the Brazilian election plays out, a stronger real has seen ethanol parity at 16 USc/lb.
    • In India, question marks are being raised over exports and whether the 5mmt mandatory exports will be filled.

    Macro/currency commentary

    • Increased investor caution has seen the AUD chop lower over the last week.
    • Despite testing newer lows, the AUD closed the week at USD 0.71.
    • Local unemployment numbers highlighted the data calendar for the week, whilst the RBA minutes showed policy makers’ concerns about tighter lending standards.
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  • QCS Market Report 17 October 2018 17 October 2018

    Sugar

    • Several attempts to break 13 USc/lb did nothing to deter the market’s hunger for higher prices in the week.
    • The trade players met at the London Sugar conference last week, expressing mixed views on the current state of play.
    • Sugar remains difficult at present, with rising ethanol and a stronger Brazilian real bolstering ethanol parity, whilst the speculative market continues to get short into the market’s strength.

    Macro/currency commentary

    • US bond yields highlighted the week as the ten-year bonds posted seven-year highs at 3.26 per cent, reflecting the US economy and interest expectations.
    • While the market is now short, the bigger picture of US and China trade troubles looms.
    • Nothing is preventing the AUD from popping up on pockets of weakness in US data and trade concerns, however, it is difficult now to see the AUD above USD 0.73.
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  • QCS Market Report 2 October 2018 2 October 2018

    Sugar

    • The sugar market received confirmation this week of the long-expected Government subsidy for Indian farmers, with the announcement of a five-million-tonne export subsidy.
    • The market will sit tight as we wait for signs of the Indian export program kicking off.

    Macro/currency commentary

    • The AUD chopped into lower ground as the US FOMC meeting provided the only stimulus of significance for the week, with the FOMC raising rates on Thursday morning.
    • A busy week ahead for the economic data calendar, with the RBA meeting on Tuesday before we see local trade and retail sales data released later in the week.
    • US monthly, trade balance and non-farm payrolls print data will be released on Friday night.
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  • QCS Market Report 17 September 2018 17 September 2018

    Sugar

    • Consecutive weeks of gains were brought to an abrupt end last week, as prices took the elevator down on Friday.
    • Chatter around significantly larger Indian export subsidies saw the prices just shy of 50 points lower after the open.
    • The latest COT report released as expected, with specs reducing their net short position from 188,738 to 163,835 lots.
    • In the face of higher ethanol prices, the Brazilian real continues to weaken as further global trade discussions contain the emerging markets currency.

    Macro/currency commentary

    • It was a quiet start to the week for the AUD, oscillating around USD 0.71.
    • Thursday was the highlight of the local calendar, with the release of better-than-expected unemployment data. As a result, the AUD traded near the week’s high of USD 0.7229.
    • The AUD’s run was stunted on Friday night as the US rounded out the week with a strong non-farm payrolls print, and it closed the week near USD 0.7150.
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  • QCS Market Report 13 September 2018 13 September 2018

    Sugar

    • Sugar producers across the market have enjoyed the recent lift in sugar prices over the past two weeks. After trading at prompt life-of-contract lows, the soon-to-expire October18 contract staged a rally, seeing it above 11 USc/lb.
    • In India, the government is yet to provide an export policy, but in an election year, it seems inevitable it will do all it can to incentivise exports.
    • Friday night’s Commitment of Traders (COT) report stunned many as the specs moved to a record 188,738 lots net short.

    Macro/currency commentary

    • A bumpy ride for the AUD over the past week, oscillating through USD 0.7160–0.7230.
    • The RBA met on Tuesday, leaving rates on hold as expected. The accompanying statement (which was the main focus for most) maintained a neutral stance, without mentioning the highly publicised independent rate increases passed on by local banks
    • The AUD opened higher on Friday, before gains were pared back on firming US data on Friday night.
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