Sugar rush

Wilmar surprised the commodities market for sugar again yesterday by announcing that they will be taking physical delivery of 9073 contracts of the commodity deliverable for July. This follows a similar move in May when they surprised the markets by also opting to take delivery of a larger physical cargo of sugar in the cash market then. The markets there may have been taken aback by both these moves as Wilmar’s influence- as one of the world’s largest traders of raw sugar- could reverse the declining trend for sugar with possibly further rises to come. Furthermore, both exercises (to take physical stock) came against the ‘grain of play’ as until now, it is understood that large global stocks of sugar exists in most inventories. A fear that El Nino could cut supply for next year’s stock may be a key factor here. Memories point back to 2009 when El Nino caused a severe drought, which pushed sugar prices to their highest levels in 30 years, almost three times where they are today. Watch this space.

Greek drama continues

Greek Prime Minister Tsipras offered enough hope to spring a relief rally by suggesting Greece would meet most of the demands of its creditors in the most recent proposal. However, Greek banks remained closed while the European Central bank deliberated providing more emergency funding Nonetheless, with the third day of banks closure, Greeks from the sandy shores of Elafonissos to the glitzy district of Syntagma Square in Athens are starting to buckle under the strain of reduced household liquidity. If anything to go by, reports of locals switching from the No camp to the YES camp may just suggest the beginning of a growing movement signalling that Mr Tsipras, may no longer be the one that they want to represent them on the negotiating table.

Crude WTI

Oil demonstrated one of the more promising moves last night, slumping as much as 4% to test the bottom of its 3 month trading band. Progress in the Iranian nuclear talks with also a surprise build in the EIA/DOE weekly inventory (vs. expectations for a drop) contributed to the movement here. Looking at the charts below, the tight trading band of between USD57 -61 has been broken by the moves last night. The break after this long consolidation may encourage a fast move to test the next support of USD 54. However if Oil manages to rebound from last night slide back above the key USD57 level, then we may just see it continue to drift sideways again for a little while.