Sugar #11 Mar ’22
In a continuation of last week’s move, we keep going downstairs in the sugar markets, a movement that looks like a mix of the very weak macro picture in the Softs/Energy complex, a realization of profits and, ultimately, a better picture on the availability of sugar for the next year.
Overall, we have seen the Oil complex fall by the most in one day month to date. The spread of Omicron, massive lockdowns in Europe and senator Manchin’s revolt on the USD 2 trillion package proposed by US President Joe Biden have prompted a large selloff that spilled over all of the commodities complex (and the market as a whole). Additionally we are seeing good prospects of weather for Brazilian cane-producing regions, after fears that the already confirmed La Niña phenomenon would prompt another dry season eased.
The net result of all this was a 0.52 drop on the SBH2 raw sugar and 10.2 USD/MT drop on the QWH2, which happened steadily throughout the session after the market already gapped by -0.36 points at the open. The BRL saw a similar depreciation, as well as the other EMFX currencies as the market looked for a safe haven whilst strategies are re-evaluated.
