• Weekly Market Report 9 May 2018 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 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 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 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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  • QCS Weekly Market Report 26 March 2018 26 March 2018

    Sugar

    • On the back of further upward crop revisions in Thailand and India, raw sugar futures printed fresh lows, seen last in September 2015.
    • In addition to further upward crop revisions, the Indian Government scrapped their export quota, as fears of even more sugar on the market shook the global market.
    • Brazil and its ethanol output will be watched by more as many speculate on how much sugar and ethanol is produced this coming season.

    Macro/currency commentary

    • The AUD is currently being led by a strong macro USD and Euro theme.
    • A short week for markets given the Good Friday public holiday, with very little on the economic data calendar.
    • Expect price action to ramp up again next week as markets return from the long weekend and there is a bigger window for US President Trump to reply to China’s trade responses.
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  • QCS Weekly Market Report 8 March 2018 8 March 2018

    Sugar

    • Raw sugar futures have struggled to break free of the last month’s 13–14 USc/lb range.
    • Upward revision of the Indian crop from 26mmt to 29mmt drove the market lower on Wednesday.
    • The market is still ‘talking’ about a statistical surplus, however, we are yet to see this manifest in the physical trade flows.

    Macro/currency commentary

    • A volatile month for the AUD, testing highs near USD 0.80 before sliding to near USD 0.77.
    • AUD strength stalled in response to FOMC indications that US interest rates may have room to move higher, with faster-than-expected inflation growth.
    • The RBA left rates on hold, with minimal change to the policy statement.
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  • QCS Weekly Market Report 13 February 2018 13 February 2018

    Sugar

    • An uneventful week for raw sugar futures, which traded a 76-point range to finish the week slightly higher.
    • Dubai Annual Sugar Conference attendees were overwhelmingly bearish due to statistical surpluses on the way.

    Currency/macro commentary

    • Following increased volatility in global asset markets, the AUD has underperformed in the last week.
    • Over the week, the USD made up for recent weakness as yields soared, while the AUD bottomed out at USD 0.7759.
    • Locally, we saw the first RBA meeting of 2018, which was accompanied by commentary perceived as ‘more upbeat’ as the RBA left rates on hold.
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  • QCS Weekly Market Report 5 February 2018 5 February 2018

    Sugar

    • Raw sugar futures seesawed across a 58-point range last week, before eventually settling near the week high on Friday night.
    • Market fundamentals remain solid as the specs historical net short position and ethanol parity in Brazil continue to keep prices at bay.

    Currency/macro comments

    • The AUD remained under pressure into the end of the week as US Payrolls data released better than expected.
    • In addition to lingering weakness following a soft CPI print, the AUD closed at the week’s low.
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  • QCS Weekly Market Report 24 January 2018 24 January 2018

    Sugar

    • Further weakness was seen last week as prices fell all the way to Friday night.
    • Prompt March18 contract found decent support near 13 USc/lb to settle the week at 13.25 USc/lb.
    • In India, the Government revised their production estimates for the season higher.
    • In Brazil, weather forecasts remain average for the rest of the wet season, whilst most of the attention is now on how much ethanol will be produced.

    Currency/macro commentary

    • The AUD maintained an USD 0.80 handle, ensured by weakness flowing from the US Government shutdown on Friday night.
    • AUD price action was highlighted by some stronger local employment data.
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  • QCS Weekly Market Report 16 January 2018 16 January 2018

    Sugar

    • After a strong performance over the Christmas break, raw sugar futures slipped dramatically last week.
    • A shortened trading week saw the market close on the front foot. Expect to see some of this follow through when the US returns from the long weekend.
    • In Thailand and India, weather remains accommodating as respective harvests continue to flourish, with increased output estimates.

    Currency/macro comments

    • The AUD enjoyed a strong rise through the end of 2017 and the beginning of 2018.
    • Five-month highs continue to hold as the AUD traded through USD 0.7900 on the week.
    • Stronger than expected US CPI data did little to stifle a rampant AUD, which will look to test USD 0.80 this week.
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