REPORTS

We are coming into the N18 expiry run in and there is an expectation of strong Brazilian pricing to come into the market before the end of the month.

We have a macro environment for the sugar bears which is looking very much like a stronger dollar is on the horizon, (we have concerns over the “EU experiment”, Argentina and Turkey domestic currency problems, and a dichotomy of the strongly hawkish FED with the dovish G7). The Oil market has weakened recently as Russia in particular is seen to be looking to up supply, and OPEC quota, using Venezuela’s production problems as an excuse/reason/mask to generate dollars (in the new “sanctions era” instigated by President Trump in response to geopolitical threats posed by Russia in US and foreign sovereign states). Furthermore, the economic press is rife with stories/uncertainty/mixed scenarios/conjecture/knee jerk response of possible trade wars involving the US pretty much versus everyone resulting in a higher probability of headline driven trading events (we have seen some “spikey” sessions already in Aluminium and Soy concerning machinations between US/Russia/China). There is a concern for inflation but overall the winds are negative commodities. This probably helps to explain why the sugar record COT net spec short position which was pretty much covered still had a residual -40k/-50k still in there when we went to the recent high of 12.97.