QSL Market Update: Recent Episodes
QSL
Sugar Overview: The stagnant ICE 11 sugar market experienced another week of trading in a narrow range. The March 2022 contract lost 6 points (0.3%) over the week to settle at 18.20 USc/lb, after trading from a low of 17.96 USc/lb to a high of 18.48 USc/lb.
Currency Overview: The Australian dollar found some strength over the week, despite markets remaining cautious as the world waits to see how the Russia/Ukraine situation plays out. The AUD traded from a low on Monday of 70.68 US cents to a high of 72.28 US cents on Thursday.
Current at 22 February 2022
Sugar Overview: The ICE 11 sugar market was trapped in range-bound trading after little change to the fundamental outlook of sugar for another week. The March 2022 contract closed the week up 3 points at 18.26 USc/lb after trading from a low of 17.84 USc/lb on Tuesday, and then on to a high of 18.68 USc/lb on Wednesday.
Currency Overview: The Australian dollar strengthened steadily across the week, still slowing rebuilding post the hawkish Federal Open Market Committee (FOMC) meeting a fortnight ago. The AUD traded from a low on Monday of 70.65 US cents to a high of 72.49 US cents on Thursday.
Current as of 14 February 2022
A lack of convincing fundamental factors in the raw sugar market appeared to cause the ICE 11 market to trade in a choppy fashion across the week as speculators, rather than commercials, influenced the market. The prompt March 2022 contract traded to a high of 18.56 USc/lb then falling to below 18.00 USc/lb making a low of 17.86 USc/lb, before recovering and closing the week at 18.23 USc/lb.
Economic growth has all but ceased in Brazil as the Central Bank attempts to control the pandemic-driven inflation with some of the most aggressive rate tightening cycles in the world. The Central Bank of Brazil raised interest rates by 150 points as anticipated last Wednesday, dragging the rate from 9.25% up to 10.75%. The Brazilian real was trading at $5.33 USD/BRL at the time of writing this market report (8 Feb 2022).
Report current as at 8 February 2022.
The ICE 11 raw sugar market came under heavy macroeconomic pressure from a rising US Dollar, erasing almost all of the previous week's gains. The prompt March 2022 ICE 11 contract made its high on Monday of 18.98 USc/lb before falling to a low on Friday of 18.09 US c/lb, and closing the week down 3.7% at 18.20 USc/lb.
Brazilian president Jair Bolsonaro has back-flipped on his proposal to abolish fuel taxes (which may have resulted in a severe negative impact on ethanol prices), and is now reported to only be dropping the tax on diesel and cooking gas.
The Australian dollar sustained heavy losses last week as markets braced for interest rate hikes from the Fed (US Federal Reserve System), causing the US Dollar to post strong gains. The AUD traded from a high of 71.88 US cents on Monday down to a low of 69.68 US cents on Friday.
Update current as at 1 February 2022.
The ICE 11 raw sugar market rose higher on Tuesday's session open, after being closed on Monday for the Martin Luther King Jr. public holiday in the United States. After a massive speculator liquidation the previous week, bullish sentiment returning to the market pushed the March 2022 ICE 11 contract through the 19 USc/lb barrier to a high of 19.29 USc/lb on Thursday and closing the week at 18.90 USc/lb, up 58 points on the week.
The Australian dollar traded sideways not moving far from its usual range for yet another week, as markets await further news on how the Fed (US Federal Reserve System) and the RBA (Reserve Bank of Australia) plan to attack rising inflation levels in the US and Australia. The AUD traded from a low of 71.70 US cents on Tuesday, up to a high of 72.77 US cents on Thursday before closing the week at 71.82 US cents.
Report current as at 25 January 2022.
The prompt March 2022 ICE 11 contract has recovered slightly after its major sell-off over the Christmas break. The contract traded to a high of 18.47 USc/lb on Wednesday, down to a low of 17.94 USc/lb on Thursday, before closing the week at 18.31 USc/lb.
The Aussie dollar started the week as low as 71.49 US cents before strengthening to 73.14 US cents on Thursday and closing the week back at the 72 US cents anchor. Sentiment is mixed with overall equities underperformed while the energy sector outperformed.
Catch up on all the latest sugar market news and currency activity. Report current as at 18 January 2022.