Sugar:

Raw sugar futures were moderately higher over the last week. News of an ethanol import duty in Brazil (at 20% over 600m litres) saw the market trade positively during Friday night’s session to a week high. Interestingly, the front Oct17/ Mar18 spread closed 10 points higher on the week, from –76 to –66. Forecasts for better rain in India have come to fruition as concerns over the Indian crop are likely put to bed. In Brazil, the weather appears favourable to cane, with more wet weather on the way. The latest Commitment of Traders report has highlighted a record net short spec position, with Friday’s report showing specs at 133,240 lots short, exceeding the previous record 132,55 lots, set in March 2015. Looking ahead, we will see the latest UNICA report for 1H August. Expectations remain in favour with sugar with strong cane/sugar output.

AUD:

A generally quieter week for the AUD. Markets awaited the speeches of US Fed Chair Yellen and European Central Bank’s Mario Draghi at the Jackson Hole symposium on Friday. Many speculated the potential for both representatives to discuss monetary policy settings for central banks. However, watchers were let down as both bankers avoided the topic. The AUD bobbed over a shy 88 point range, eventually closing the week at USD 0.7935. Looking ahead, this week we see US GDP, Non-Farm Payrolls and China manufacturing PMI as key drivers. Payrolls are expected slightly weaker than last month at 180k vs 200k (+20k). Continued growth should see the US Fed maintain its tightening schedule this year.