CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Commodity Wrap – Sugar, Silver, OIL, Soybean

14:46 26 September 2018

In this week’s commodity wrap we present you 4 markets that look interesting or/and have posted some major price moves: Sugar, Silver, OIL, Soybean

Sugar

Start investing today or test a free demo

Open account Try demo Download mobile app Download mobile app
  • September has been wild for sugar prices – they rallied sharply only to turn lower
  • We suspect that a moderate short covering was responsible for a price pick-up but a sustained surplus encouraged traders to enter fresh shorts
  • Australia plans WTO intervention to stop heavy subsidies for cane-growers in India
  • Both Australia and Brazil plan action to fight off export subsidies in India
  • Elevated USDBRL keeps pressuring prices of Sugar and Coffee, investors should watch incoming elections (7 October)
  • A rally in oil prices could support Sugar prices over a medium term as more cane will be used for ethanol production

Sugar positioning remains low and could help prices if fundamentals improve or/and BRL regains traction. Source: Bloomberg

Sugar prices have reversed a rally in a sign that bears remain strong. The $10 zone is still crucial. Source: xStation5

Silver

  • Silver/Gold ratio close to multi-decade lows
  • Silver unable to benefit from a pick-up in gold, platinum prices
  • Silver is way below forecasts from major producers ($17-19/oz) – could trigger supply adjustment
  • ETF holdings still relatively large, could depress prices if US dollar remains strong

A silver/gold price ratio is at very low levels indicating a relative value in silver. Source: goldprice.com

Silver prices diverged from gold, platinum – is there a convergence opportunity? Source: xStation5

OIL

  • Based on the historical output data OPEC should have about 1.3mbd of spare capacity, mostly controlled by Saudi Arabia
  • Even 1.5mbd of supply is under threat this year
  • A season of maintenance at the US refineries could reduce demand, push inventories higher
  • EU, Russia and China plan to create a special vehicle to bypass sanctions on Iran - US has threatened to enforce sanctions anyway
  • Supply factors to determine oil prices in a short run, relief possible after Iran sanctions kick in

OPEC may have a limited capacity to address declining supplies from Iran. Source: Bloomberg

A strong upwards trend remains in place, OIL (Brent) prices are facing a 61.8% fibo of the last major bear market. Source: xStation5

Soybean

US and Brazilian soybean prices have diverged massively due to trade conflict with China

Any deal with China (Chinese buyers had to turn to Brazil for soybean imports after tariffs were applied) could be very positive for US prices

Technically a pin-bar formation on the monthly chart could raise hopes for price recovery

Soybean prices had hit the lowest levels of this decade in September but managed to recover. Is the worst over? Source: xStation5

 

This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

Back
Xtb logo

Join over 1 Million investors from around the world

We use cookies

By clicking “Accept All”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.

This group contains cookies that are necessary for our websites to work. They take part in functionalities like language preferences, traffic distribution or keeping user session. They cannot be disabled.

Cookie name
Description
SERVERID
userBranchSymbol cc 11 October 2024
adobe_unique_id cc 10 October 2025
test_cookie cc 1 March 2024
SESSID cc 9 September 2022
__hssc cc 10 October 2024
__cf_bm cc 10 October 2024
intercom-id-iojaybix cc 7 July 2025
intercom-session-iojaybix cc 17 October 2024

We use tools that let us analyze the usage of our page. Such data lets us improve the user experience of our web service.

Cookie name
Description
_gid cc 9 September 2022
_gat_UA-22576382-1 cc 8 September 2022
_gat_UA-121192761-1 cc 8 September 2022
_ga_CBPL72L2EC cc 10 October 2026
_ga cc 10 October 2026
AnalyticsSyncHistory cc 8 October 2022
af_id cc 31 March 2025
afUserId cc 1 March 2026
af_id cc 1 March 2026
AF_SYNC cc 8 March 2024
__hstc cc 8 April 2025
__hssrc

This group of cookies is used to show you ads of topics that you are interested in. It also lets us monitor our marketing activities, it helps to measure the performance of our ads.

Cookie name
Description
MUID cc 4 November 2025
_omappvp cc 22 September 2035
_omappvs cc 10 October 2024
_uetsid cc 11 October 2024
_uetvid cc 4 November 2025
_fbp cc 8 January 2025
fr cc 7 December 2022
muc_ads cc 10 October 2026
lang
_ttp cc 4 November 2025
_tt_enable_cookie cc 4 November 2025
_ttp cc 4 November 2025
hubspotutk cc 8 April 2025
YSC
VISITOR_INFO1_LIVE cc 8 April 2025

Cookies from this group store your preferences you gave while using the site, so that they will already be here when you visit the page after some time.

Cookie name
Description
personalization_id cc 10 October 2026
UserMatchHistory cc 8 October 2022
bcookie cc 10 October 2025
lidc cc 11 October 2024
lang
bscookie cc 8 September 2023
li_gc cc 8 April 2025

This page uses cookies. Cookies are files stored in your browser and are used by most websites to help personalise your web experience. For more information see our Privacy Policy You can manage cookies by clicking "Settings". If you agree to our use of cookies, click "Accept all".

Change region and language
Country of residence
Language