Raw sugar futures broke free of recent range-bound conditions on Friday night, posting three per cent gains on the day. Prompt March18 contract settled above recent technical resistance at 14.40 USc/lb. Prompted by technical indicators, the rally sustained higher over the remainder of the session to settle near fresh highs. Friday night saw the latest Commitment of Traders report out, with specs trimming net short positions by 3,500 lots to be net short 110,500 lots. The 1H October UNICA report showed ATR and sugar mix lower than expected. An attempt into higher ground was muted by more sideways price action. Looking ahead, fine weather is forecast in Thailand with monsoons pulling up in south west India.
On the back foot, a resurgent USD has seen the AUD fall two cents over the past week. Aided by softer local data, the USD has continued to firm on the likelihood of Trump tax reform getting up. Additionally, Trump will announce his new Fed Chair in the coming weeks with two leading candidates (Jerome Powell and John Taylor), both considered more hawkish than current Chair Janet Yellen. Additionally, we see the FOMC, non-farm payrolls and trade balances out of the US later in the week. Local data is highlighted by trade balances and retail sales on Thursday and Friday.