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Why Global Sugar Prices Might See A Rebound

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On 8 th  Nov, we had released a trade recommendation on sugar arguing that sugar prices are in for a rebound considering there was maximum bearishness. https://macro-spectrum.com/trade-recommendation/long-sugar Sugar prices on the time of release were $14.07/lb. Currently the same are at $14.93/lb and we expect further upswing. Further upward momentum can build once it crosses $15.23/lb, the 50 DMA on a weekly closing basis. We see the case for sugarcane mills in top grower Brazil to divert more cane for Ethanol than sugar considering the low sugar prices currently. In Brazil, millers can choose to make either sugar or biofuel from their cane, depending on what’s more attractive. As raw sugar futures slumped this year, there is a strong possibility that in the coming season mills might consider greater than anticipated ethanol production. Going into details, sugarcane production in Brazil’s Centre South region is expected to rise to 620 million tons in the 2026-27 season, compared...
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HEDGING DEMAND INCREASES AGAINST AI DEBT

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  Lenders and investors are looking to protect themselves against potential defaults by tech companies, known as hyperscalers, as they borrow hundreds of billions of dollars to invest in artificial intelligence. Demand for credit protection has increased, with the cost of credit derivatives on Oracle Corp.'s bonds more than doubling since September, and trading volume for credit default swaps tied to the company jumping to about $4.2 billion. Banks and money managers are trading more derivatives that offer payouts if individual tech companies default on their debt, with some of the biggest buyers of single-name credit default swaps being banks that have seen their exposure to tech companies surge in recent months. Hyperscalers are highly rated, but they’ve really grown as borrowers and people have more exposure, so there are more dialogues happening on hedging. Trading activity is still small compared with the amount of debt that is expected to flood the market. But the growing de...
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OPEC FINALLY ADMITS THE SUPPLY GLUT

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OPEC (Organisation of the Petroleum Exporting Countries) finally admitted what IEA (International Energy Agency) has been saying long for months now. In it’s Nov monthly report released yesterday, OPEC flipped estimates for global oil markets in the third quarter from a deficit to a surplus. World oil output exceeded demand by 500,000 barrels a day during the period, OPEC said in its latest monthly MOMR report, compared with a 400,000-barrel shortfall estimated a month ago. OPEC raised estimates for supplies outside OPEC and its allies in the period by 890,000 barrels a day, with just over half of the change driven by the US. The same report also indicated that the OPEC+ alliance pumped more crude than it estimated was needed last quarter.  Heading into 2026, OPEC’s data does indicate a surplus, though on a more moderate scale than other forecasters. The alliance would need to produce 42.6 million barrels a day during the first quarter to balance global demand, less than the ...
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GOLD TRUMPS BITCOIN AS A DEBASEMENT CHOICE

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Amidst the current fiscal worries across DMs (developed markets) & never-ending government debt levels, investors globally were looking for assets which can stand ground against dollar. Should fiscal discipline weaken further or political tensions heighten more, leading to expanded money supply or renewed quantitative easing, both gold and cryptocurrencies were looked upon as alternative stores of value. This theory was coined as debasement trade. Both Gold & Bitcoin were seen as not impacted by ups and downs of economic cycles. Both offered hedging opportunities for investors from systematic risks in financial markets. Both are supply constrained as well. But recent underperformance of Bitcoin gives credence to Gold as a better hedge against fiat currencies. The fall in Bitcoin is consistent Bitcoin has fallen as much as 7.4% to dip below the $100,000 mark yesterday for the first time since June, down more than 20% from a record high reached a month ago. Long-time Bitcoi...
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