Pool Update

Update as at Wednesday 20 September 2017

The information and views expressed in this report are those of the writer and do not necessarily reflect the views of MSF
Sugar. While all care is taken in the preparation of this report the reliability or accuracy of the information provided in the document is not
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2017 Season Pool Prices (Pool valuation as at 14 September 2017)

20-9-2017

Forward Season Pool Prices (Pool valuation as at 14 September 2017)

FS 20-9-17

Net AUD/T (IPS) subject to change with changes in the ICE 11 market price affecting unpriced exposures, movement in the AUD/USD exchange rate and also due to  movements in the Shared Pool.

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Major Headlines

  • Sugar prices broke out of a six week range on Friday, breaking and closing above the 100 Day Moving Average for the first time since early March. Last week’s gains were not held at the start of this week, with prices returning to their old range. October is predicted to trade either side of 14 cents.
  • Speculators continue to liquidate their large short or net sold position as the market makes new ground. Speculators hold 91,794 lots (4.7mln MT) of net sold futures, compared with 133,284 lots three weeks ago. Producer selling against Speculator buying means that the market is not advancing as expected.
  • Ethanol parity is ~14.50, and it is likely to encourage more ethanol/less sugar on the remaining crush.
  • Unica data released last week came weaker than expected, signalling a larger than expected shift from sugar production towards ethanol production.
  • A significant number of storms in the eastern Pacific and North Atlantic are causing problems to sections of the north and central American crop, although there are no confirmed reports of major crop losses yet.
  • Pakistan is rumoured to be providing an export subsidy for up to 500k MT – although there is little clarity around the proposal.
  • White sugar premiums continue to weaken (USD62/t) due to the expected influx of EU exports.
  • China has released 370k MT of stocks, in an attempt to ease its strong domestic market.
  • The US Dollar has stabilised as the administration has a small number of wins as well as disappointing data from China.
  • Commodity prices are generally weaker with softer Base Metals due to weaker Chinese growth. Energy prices are showing signs of strengthening and grain markets are stronger.
  • The BRL has been stable with reduced volatility in currency markets generally.
  • The Australian Dollar is trading either side of 80c, mostly attributable to movements in the US Dollar.
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