SUGAR MARKET OVERVIEW

October sugar moved slightly lower (–0.10 USc/lb) over the week with Oct closing close to its lows at 16.97. Solid commercial buying and perceived demand from Asia just under current market levels has slowed the move lower. The real movers, however was further out the curve, selling off on reduced fears of an El Nino event affecting the BRL crop and favourable weather conditions in India and Thailand. The Oct/Mar Spread, rallied from –180 to –137. This coming week we have the Kingsman conference in Thailand, and all eyes will be on the news and mood coming from that congregation. Initial reports are that the crop has suffered damage due to dryness, however the extent of the damage is uncertain. The latest reports from Thailand indicate an expectation of a similar-sized sugar make to the last campaign.

CURRENCY MARKET OVERVIEW

The AUD has continued its sideways grind with prices trapped in a 9200–9500 range for the last four months. Governor Stevens has started ‘talking the currency lower’ with more expected from his speech to the Anika foundation on Tuesday. The crash of MH17 caused a sell off on risky assets across the board on Thursday, but lack of follow through results in these new positions being washed back out late on the Friday session. USD/BRL had a 2.21–2.26 range but finished the week virtually unchanged at 2.2262. The market will be looking to inflation numbers both here and the US as well as the Chinese PMI for leads although the focus will remain squarely on Europe and the West’s reaction to events in Ukraine.