Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
You can access both of our platforms from a single Saxo account.
Month-long sugar slide pauses amid concerns over Brazil’s supply
Ole Hansen
Head of Commodity Strategy
Over the past week, raw cane sugar futures traded in New York have surged more than 8% due to a sudden and potential deterioration in what was previously an ample supply outlook. Last November, sugar prices hit a 12-year high amid tight global supplies after India and Thailand, two major exporters, curbed their supply to protect local stocks and control inflation. However, the prospect of a record sugar crop in Brazil, the world’s top exporter, triggered a month-long price slide, which only paused last week when prices returned to USD 0.175 per pound—a level that has held firm on several occasions since 2022.
Since Friday, prices have jumped back above USD 0.19 per pound following an unprecedented outbreak of fires across sugar-cane fields in Brazil. While it is too early to fully assess the impact, traders expect that global sugar supply may be negatively affected in the coming months until additional production from Thailand and India can contribute to supply, beginning around November.
Bloomberg recently reported: “São Paulo, responsible for producing most of the country’s sugar, is facing a record number of fires due to low humidity and a blistering heat wave. There were as many as 2,000 outbreaks this weekend, according to the sugar cane industry group Orplana. Although subsequent rains have helped reduce the risk of new outbreaks, as much as 60,000 hectares of crop area were affected.”
The overall impact might still be relatively small, with experts suggesting that the burned sugar cane can still be harvested and processed. However, mills will need to act quickly as the cane begins to lose quality just a few days after burning.
The weekly chart suggests some consolidation after prices once again found support around the critical USD 0.175 per pound level. Recent price movements are likely driven by speculators unwinding short positions, which were established in an attempt to push prices below this support level. For the rally to indicate a true turnaround, the price would need a weekly close above USD 0.19 per pound, followed by reclaiming the USD 0.2070 per pound level, a break above which may confirm a double bottom formation.
Recent commodity articles:
27 Aug 2024: Libya supply disruptions propel crude prices higher
26 Aug 2024: COT: Funds boost metals investment as dollar long positions halve amid weakness
23 Aug 2024: Commodities Weekly: Metal strength counterbalancing energy and grains
22 Aug 2024: Persistent supply contraints keep cocoa prices elevated
21 Aug 2024: Weak demand focus steers crude towards key support
19 Aug 2024: Resilient gold bulls drive price to fresh record above USD 2500
19 Aug 2024: COT Buyers return to crude as gold stays strong; Historic yen buying
16 Aug 2024: Commodities weekly: Gold strong as China weakness drags on other markets
9 Aug 2024: Commodities weekly: Calm returns to markets, including raw materials
8 Aug 2024: Sentiment-driven crude sell-off eases, allowing traders to focus on supply risks
7 Aug 2024: Limited short-selling interest observed during copper's recent aggressive correction
6 Aug 2024: Video: What factors are fueling the current market turmoil and gold's response
5 Aug 2024: COT: Broad commodities sell-off gains momentum; Forex traders seek JPY and CHF
5 Aug 2024: Commodities: Position reduction in focus as volatility spikes
2 Aug 2024: Widespread commodities decline in July, with gold as the notable exception
31 July 2024: Crude's month-long slide halted by fresh Mideast worries
30 July 2024: Record demand explains gold's current resilience
29 July 2024: COT: Energy and metals selling cuts hedge fund long to four-month low
4 July 2024: Sluggish US economic indicators boost demand for gold and silver
4 July 2024: Podcast Special: Quarterly Outlook - Sandcastle Economics
2 July 2024: Quarterly Outlook - Energy and grains in focus as metals pause
1 July 2024: COT: Crude long builds ahead of Q3 while grains selling accelerate
Latest Market Insights
Quarterly Outlook
-
-
Quarterly Outlook
Equity Outlook: Will lower rates lift all boats in equities?
Peter Garnry
Chief Investment Strategist
After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto... -
Quarterly Outlook
FX Outlook: USD in limbo amid political and policy jitters
Charu Chanana
Chief Investment Strategist
As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ... -
Quarterly Outlook
Commodity Outlook: Gold and silver continue to shine bright
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c... -
Quarterly Outlook
FX: Risk-on currencies to surge against havens
Charu Chanana
Chief Investment Strategist
Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo... -
Quarterly Outlook
Equities: Are we blowing bubbles again
Peter Garnry
Chief Investment Strategist
Explore key trends and opportunities in European equities and electrification theme as market dynami... -
Quarterly Outlook
Macro: Sandcastle economics
Peter Garnry
Chief Investment Strategist
Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p... -
Quarterly Outlook
Bonds: What to do until inflation stabilises
Althea Spinozzi
Head of Fixed Income Strategy
Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ... -
Quarterly Outlook
Commodities: Energy and grains in focus as metals pause
Ole Hansen
Head of Commodity Strategy
Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...
Disclaimer