Indicative Pool Prices. Week ending 23 September By Carla Keith and Cathy Kelly, QSL Industry Relationship Managers

Transcription

1 Week ending 23 September 2016 By Carla Keith and Cathy Kelly, QSL Industry Relationship Managers Carla Ph Cathy Ph Indicative Pool Prices The table below provides an overview of the QSL Pool Prices Matrices available at All prices quoted are indicative only and do not include an allocation from the QSL Shared Pool. Growers should always consult their mill for information about their individual cane payments.

2 QSL Market Snapshot Current as at 23 September, 2016 QSL updates the daily indicative prices for each of the four futures contracts for 2016, 2017 and 2018 Seasons here. The graphs below track ICE #11 movement for the 2016 and 2017 Seasons.

3 QSL Market View Current as at 23 September, 2016 This week saw sugar futures reach four-year highs on the back of updated production figures from Brazil which suggest a lower-than-expected yield for the tail end of the current season. Also at play is the simple fact large sugar end users are still underweight with their pricing, with investors continuing to favour sugar and commodities. QSL s view remains that current prices will remain firm, with a range of US21c/lb to US24c/lb over the short to medium term, with all eyes now firmly on the OCT16 contract expiry. CURRENT MARKET DRIVERS As at Current Market Global Sugar Fundamentals (exc. Brazil) Brazil Sugar Fundamentals Macro issues/ Specs ICE 11 PROMPT (Oct16) $A/mt Gross $ ICE #11 17 SEASON $A/mt Gross $ COMMENTS With sellers under less pressure to price in this environment, buyers continue to push the market higher. Consumers still underweight in pricing will continue to hold off at these levels. Market watchers fixated on a large net spec position forget that consumers are more vulnerable to further supply issues. Fundamentals suggest the global deficit to become more fruitful later this year and more prominent in Q Expectations on Brazil not being able to get whole crop off supported by the latest UNICA report, received below market expectations. Milling capacity constraints keep our 2017 view neutral. A rally in raw sugar futures is expected to show a large increase in net speculative longs (COT report due Friday night) The Fed kept rates on hold, indicating a more gradual interest rates normalisation process. AUD/USD Undermining a recently sound USD, the AUD surged to new month highs Market drivers impact on $A/mt returns. Source: Bloomberg, and 2017 ICE #11 prices reflect the mark-to-market OTC values in $A/mt as at For daily price updates visit Trend is more favourable to positive $A/mt returns. Trend is neutral to $A/mt returns. Trend is less favourable to $A/mt returns.

4 QSL Marketing Choice The recent increase in ICE 11 raw sugar prices has been warmly welcomed by the Queensland sugar industry but has also compounded the frustration of many growers who currently cannot price with QSL for the 2017 Season or beyond. While the improved prices are reflected in QSL's current 2016-Season pool results, we share the frustration of those MSF Sugar, Wilmar and Tully Sugar growers keen to conduct forward pricing with QSL but unable to do so due to the status of Cane Supply Agreement (CSA) and On-Supply Agreement (OSA) negotiations. Read this week s QSL Marketing Choice update on this issue here. Maintaining the industry s BSTs By Damian Ziebarth, QSL GM Operations One of QSL s key functions is operating and managing Queensland s six bulk sugar terminals (BSTs). Each year there are a number of capital works projects undertaken to ensure the industry s assets are well-maintained and continue to operate at world s best practice. This week we provide an overview of some of these projects for the current financial year. QSL s capital works projects are divided into three key categories: safety and the environment, critical plant replacement, and growth and efficiency. For the 2016/17 Financial Year, QSL has budgeted approximately $1.9 million for projects across these areas, while STL will contribute about $4.7 million dollars towards these initiatives. BST Roof Replacement Project QSL is currently undertaking a significant project to replace 12 ageing galbestos shed roofs with marine-grade aluminium across each of the BST sites. So far, the roofs of Sheds 2 and 3 at Mackay, Sheds 1 and 2 at Lucinda and Shed 2 at Cairns have been replaced, with work on the shed roof at the Mourilyan site due to be completed in coming weeks. The table below provides an overview of the planned replacement schedule for the remaining shed roofs. Safety Projects Year Facility Mourilyan Cairns Bundaberg Bundaberg Townsville Townsville Mackay Shed No Table 1 Proposed shed roof replacements Safety is of paramount importance to QSL. The main projects scheduled for completion this financial year include: The design and installation of additional emergency brake units on the ship loader at the Cairns BST to prevent wind gusts propelling it along its rails; Installation of improved conveyor loading beneath Shed 1 in Townsville to increase separation of the operators from the conveyor and reduce product spillage. Other safety projects also include installing conveyor-belt guarding and upgrading hand railings along the Lucinda jetty and wharf.

5 Growth and Efficiency Projects Key projects underway at the Mackay and Bundaberg sites include the bird proofing of the receiving stations. Specialised sampling systems will also be installed at Mackay, Bundaberg and Cairns sites to enable these terminals to ship sugar to China. The weigh tower at Bundaberg BST will also be upgraded. Maintaining the BST assets is an expensive but critical task to ensure each site continues to operate safely and at maximum capacity. QSL prides itself on its commitment to these sites and hopes to continue delivering gold-class standard logistical and operations services for the industry well into the future.