The market began the day a little lower and never really showed any sign of changing course, eroding steadily throughout the day to trade as low as 9.72 for Jul’20. The decline was relatively uniform down the board with the only relative strength seen for the soon to expire May’20 as solid spread buying pulled the May/Jul up to -0.07 points intra-day. The losses placed sugar at the lower end of the CRB with the index down on the day overall however the real action was once again in the USDBRL where the rate continues to haemorrhage. Moving below 5.50 yesterday we have today seen a low of 5.7329, which given the low crude values potentially moves ethanol parity below 7.50c. With the head of the federal police being fired and Justice minister Moro tendering his resignation Brazilian politics remain clouded by infighting and Bolsanaro’s unpopularity continues to grow, a combination that seems destined to send the currency onwards towards 6. Sugar did pull away from the lows late on as traders squared positions ahead of the weekend however they continue to appear weak.       

No.11 Futures

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Jon Whybrow

Jon joined CZ in 1991, working in the Treasury department before moving to join the derivatives team in 1994. Over 30 years Jon has built up significant experience across derivatives markets and products, particularly sugar, and is now Head of Flow derivatives providing market execution services for CZ’s global client base. He is responsible for the market commentaries which are published each day on CZ app.

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