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6 July 2021
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Weekly Market Overview

Indicative ICE 11 Prices
 
Season AUD/MT* Weekly Change
2021 527.97 5.06%
2022 472.82 2.70%
2023 419.68 -0.73%
2024 381.63 -3.58%
*These figures are indicative of available ICE 11 prices as at the week ending 5 July 2021 and reflect the weighted average AUD/mt price. The prices have been adjusted to include Over-the-Counter margin fees charged by banking institutions and so may differ from daily prices quoted by the ICE 11 Exchange and/or other Marketers of Growers' Economic Interest in Sugar. Values also do not account for any adjustments resulting from local Grower-Miller pricing arrangements. 

Sugar

  • The new prompt ICE 11 raw sugar contract, October 2021, finished last week up 84 points week-on-week, opening on the Monday at 17.16 USc/lb, before peaking on Thursday at 18.49 USc/lb and then closing the week at 18.15 USc/lb.
     
  • The July 2021 ICE 11 contract expiry was highlighted by a relatively small volume of sugar delivered to the tape (see our Jargon Buster), just 130,900 tonnes and all Brazilian sugar. The low volume is likely to be an indication of low sugar demand, but may also be symptomatic of the slow progress of Centre South Brazil's harvest providing the October 2021 contract some price support.
     
  • The latest Commitment of Traders data reported an increase on the net-long position as of 29 June 2021. The net speculator position is up 6000 lots to 191,000 lots net long. The United States Department of Agriculture has announced that their grain acreage and stocks are below market expectations which should incentivise speculators to continue to invest in agricultural commodities.
     
  • The Brazilian weather made the headlines again, but this time it was in relation to a potential frost occurring in two states that represent around 14% of Centre South Brazil's cane. Frosty weather can be disruptive and damaging to new crops, and the impact can be hard to measure. The news ignited a price spike on the October 2021 ICE 11 contract. However, it was short lived.

Currency  

  • The Australian Dollar (AUD) and equities markets enjoyed a bit of a recovery last week, trading from a low of 74.45 US cents to a peak of 76.02 US cents. However, it failed once again to hold above the 76 US cent level on a live basis, following news that several Australian states had gone back into COVID lockdowns.
     
  • Equities enjoyed new highs led by positive US economic data. Non-Farm Payrolls for June hit 850,000 jobs added, above the 720,000 expected. Leisure and hospitality accounted for 40% of the jobs in the month, and government hiring was also strong. 
     
  • Domestically, Aussie job vacancies grew 23% since May to be 57% above pre-pandemic levels. The Australian trade surplus also showed positive signs, up to $9.7 billion amid solid export and import figures. This positive data, COVID headaches domestically, and the looming tightening of monetary policy in the US are still a concern. The Reserve Bank of Australia (RBA) is meeting today and markets will be paying close attention to it.   

Jargon Buster

Delivering to the tape
Delivering to the tape refers to those sellers that opt to deliver physical sugar against an open sold futures position rather than closing out their position prior to that ICE 11 contract's expiry. Sellers have to make sugar available at the port they have nominated for up to 10 weeks, while buyers have this time to nominate a vessel for loading. The ‘tape’ is a slang term for ticker tape which illustrates traded markets.

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This report contains information of a general or summary nature. While all care is taken in the preparation of this report, the reliability, accuracy or completeness of the information provided in the document is not guaranteed. The update on marketing and pricing activity does not constitute financial, investment advice. You should seek your own financial advice. Nothing contained in this report should be relied upon as a representation as to future matters. Information about past performance is not an indication of future performance. QSL does not accept any responsibility to any person for the decisions and actions taken by that person with respect to any of the information contained in this report. You have received this email as you are subscribed to receive newsletters and other marketing material from QSL. We take your privacy very seriously. View our Privacy Statement on QSL’s website. When you make enquiries of QSL or sign up for QSL news or information, you thereby consent to QSL collecting and using the personal information that you provide to QSL in the operation of QSL’s business, which may include direct marketing. You may opt out of this service at any time if you no longer wish to receive any communications from us by using the unsubscribe function at the bottom of this email.

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QSL (Queensland Sugar Limited) · Level 12/348 Edward St · Brisbane, Queensland 4000 · Australia