11 August 2014

Weekly Market Report 11 August 2014


Following the large downward reversal on Monday post the Cosan terminal, October sugar remained under pressure for the rest of the week. The largest mover by far was the Oct/Mar spread which traded from a low of –1.85 to a high of –1.61. Fundamentally, the excess supply and lack of demand seems to be the sole focus of the market at the moment, with either the flat price needing to move lower or the spread to weaken further or both to help solve the problem. Friday saw a small bounce (+9) on very light volume. The Commitment of Traders report released after the close on Friday showed specs only added 13k of shorts to their position (–54k). Historically, this is not a large position and there is plenty of scope for them to continue to add to shorts. The Indian monsoon has caught up a lot from a poor start with rain coming to the cane areas that needed it the most. The Brazil crush is also progressing rapidly with small rain delays that have aided cane health.


Whist the AUD continues to trade in the 9200–9500 range, the currency weakened during the course of the week. The Reserve Bank has continued to sit on the sidelines, leaving the cash rate unchanged. The unemployment rate printed 6.4% on Thursday, meaning Australia now has an official unemployment rate higher than the US for the first time since 2007. On Friday, The RBA released their quarterly Statement of Monetary Policy. On the margin, both the inflation forecast and GDP forecast were lowered, but most importantly, the bank now expects the unemployment rate to remain elevated and not decline in a sustained way until 2016. This suggests the RBA is at least on hold for the foreseeable future with the next move in rates more likely to the downside now.

Login to the Pricing Portal

If QCS is the marketer for all or some of your GEI sugar and you would like to forward price online, please contact us  to arrange access to the Pricing Portal.

Pricing Portal