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. The fundamentals have flipped. Despite stabilising, oil prices have fallen $10, dragging ethanol along with it. Specs unwound, moving from a large net short to net long position, before the most recent Commitment of Traders report showed specs establishing a small net short position again. Likely the trigger for Monday’s attempt at 13 USc/lb, it appears to have been met with decent commercial pricing. The white premium struggled before the Dec18 contract rolled off on Thursday, losing as much as $23 in October. Many are suggesting there are cheap Indian exports in waiting. India now moves into its most active period, as exports are 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.
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. With the economic data calendar relatively quiet, Brexit concerns and political uncertainty in the UK held much of the market’s attention. As expected, the GBP significantly underperformed as the market reacted. With another quiet week on the economic data calendar, and RBA meeting minutes struggling to garner fanfare, Brexit discussions will continue to hold front for the market.