Under the pump for a large part of the week, sugar prices staged a modest recovery on Friday to end the week 20 pts higher at 13.41 c/lb. Price action suggests sugar is ‘too cheap’ below 13 USc/lb. Producers remain heavily underpriced and specs are very short – a tug of war that will see sugar remain range bound in the near to medium term. CS Brazil has seen wet weather over the past week, albeit short lived. Drier weather until the end of the month is forecast. Wet weather in India and Thailand persists, meeting previous forecasts. Overnight, Greenpool increased its 2017/2018 surplus estimate to 7.1 mmt (+1.5 mmt) on the back of a higher-than-anticipated sugar mix in Brazil and increased production in Thailand and the EU.
Unsustained USD pressure saw the AUD finish up the week above USD 0.79, despite spending some time near USD 0.78. Stronger-than-anticipated US retail sales and manufacturing data helped the USD firm early in the week, though a more dovish tone from the latest FOMC meeting minutes saw a retracement of all gains made by the USD. A quiet week on the economic data calendar locally and overseas. US Fed Chair Janet Yellen speaks at the annual Jackson Hole Policy Symposium on Friday night. Given the speech is titled, ‘Financial Stability’, there is no expectation for monetary policy to be discussed.