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Short sugar and coffee

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Short sugar and coffee The abolition of the sugar production quota in Europe next October will weigh on global prices.

ETF Securities Commodity Research Short sugar and coffee

Highlights

  • Speculative positioning in both sugar and coffee appear over-extended.
  • Brazil’s sugar production has risen and a healthy monsoon in India paves the way for a partial recovery in cane production.
  • The abolition of the sugar production quota in Europe next October will weigh on global prices.
  • Brazilian Arabica coffee output hit an all-time high in 2016, but prices rose as a result of Brazilian Real appreciation.
  • With La Niña potentially back on the cards and weather in Brazil remaining favourable, the next season’s Arabica crop may surprise on the upside.

Sugar rally to run out of steam

Sugar has gained over 80% since February 2016 as the market is expected to have entered a second consecutive year of a production deficit. Prices are now trading at a 5-year high.

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The futures market has become very bullish. Net long positioning in the futures market hit an all-time high a few weeks ago and remains more than 2 standard deviations above its 5-year historic average.

We believe that this optimism is overdone. Sugar production in Brazil, which produces close to 25% of global output, is running close to 20% higher than last year. While there is some fear that the season could be cut short, we believe that higher prices will encourage mills to continue production. Indeed, the cane harvest, which is close to 70% complete, is also running 10% ahead of last year. Moreover, with sugar prices this high and weakness in oil prices, more cane could be diverted to sugar production over ethanol production.

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India, the second largest producer of sugar, has received normal levels of rain this monsoon in contrast to the previous year’s failed monsoon. Reservoir levels have filled to around 75% as of October 20th, which is exactly in line with the 10-year average for this time of the year (and 128% of the corresponding period last year). Reservoir levels in the key cane producing areas was even higher. With most cane in India being irrigated, availability of reservoir water will be important for the following season.

EU to scrap sugar beet production quota

The EU is set to abolish its sugar beet production quota in October 2017. While the ICE Sugar No. 11 futures contract is based on the delivery of raw cane sugar, the greater availability of a close substitute could impact its price. Although the EU will eliminate quotas on production of sugar beet, it is not set to change tariffs on the import of raw cane sugar. Refiners in the EU are therefore more likely to use domestic beet for sugar production. While this is more of a concern for next year, prices of raw cane sugar could begin to weaken in advance.

Arabica price rises despite Brazilian production increase

Arabica coffee prices have risen close to 40% since January and speculative positioning is over 1 standard deviation above historic average.

Brazil dominates Arabica coffee production and has a significant influence on the price of the commodity.

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2016 Arabica coffee output from Brazil was the highest on record despite the fears that El Niño would hamper production. The Arabica harvest in Brazil was largely complete in September.

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As the chart above indicates, coffee output in Brazil goes through biennial cycles: production rises in one year and falls in the next. The 2016 coffee crop in Brazil was a high year in the biennial cycle and 2017 will be a low year. Some of the recent price gains may reflect that we are about to enter a cyclical low year, but we caution that the pattern does not always hold (for example between 2012 and 2013).

We believe that more of the gains were driven by an appreciating Brazilian Real. The Real appreciated on the back of an impeachment of the Brazilian President. Barring any positive economic shock, we believe that most of the positive news for the Real is priced-in.

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Potential for favourable weather

Weather conditions may have turned favourable for production in Brazil. Currently rain is progressing well in the south east of Brazil (where close to 90% of its Arabica is grown). That is important during the critical ‘flowering’ process. The amount of flowering determines how much coffee cherries will develop on each coffee bush.

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Important Information

General

This communication has been issued and approved for the purpose of section 21 of the Financial Services and Markets Act 2000 by ETF Securities (UK) Limited (“ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (the “FCA”).

The information contained in this communication is for your general information only and is neither an offer for sale nor a solicitation of an offer to buy securities. This communication should not be used as the basis for any investment decision.

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AXQE ETF för den som tror på emerging markets men inte Kina

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AXA IM MSCI Emerging Markets ex-China Equity PAB UCITS ETF EUR Hedged Acc (AXQE ETF) med ISIN IE000Y65F5C2, försöker följa MSCI Emerging Markets ex China Climate Paris Aligned (EUR Hedged) index. MSCI Emerging Markets ex China Climate Paris Aligned (EUR Hedged)-index spårar aktier från tillväxtmarknadsländer (exklusive Kina). Indexet syftar till att ge större vikt till företag som gynnas av omställningen till en ekonomi med lägre koldioxidutsläpp. Dessutom beaktas EU:s direktiv om klimatskydd. Moderindexet är MSCI Emerging Markets ex China. Valuta säkrad till euro (EUR).

AXA IM MSCI Emerging Markets ex-China Equity PAB UCITS ETF EUR Hedged Acc (AXQE ETF) med ISIN IE000Y65F5C2, försöker följa MSCI Emerging Markets ex China Climate Paris Aligned (EUR Hedged) index. MSCI Emerging Markets ex China Climate Paris Aligned (EUR Hedged)-index spårar aktier från tillväxtmarknadsländer (exklusive Kina). Indexet syftar till att ge större vikt till företag som gynnas av omställningen till en ekonomi med lägre koldioxidutsläpp. Dessutom beaktas EUs direktiv om klimatskydd. Moderindexet är MSCI Emerging Markets ex China. Valutasäkrad till euro (EUR).

Den börshandlade fondens TER (total cost ratio) uppgår till 0,30 % p.a. AXA IM MSCI Emerging Markets ex-China Equity PAB UCITS ETF EUR Hedged Acc är den enda ETF som följer MSCI Emerging Markets ex China Climate Paris Aligned (EUR Hedged) index. ETFen replikerar det underliggande indexets prestanda genom full replikering (köper alla indexbeståndsdelar). Utdelningarna i ETFen ackumuleras och återinvesteras.

AXA IM MSCI Emerging Markets ex-China Equity PAB UCITS ETF EUR Hedged Acc är en mycket liten ETF med tillgångar på 0 miljoner euro under förvaltning. Denna ETF lanserades den 11 februari 2025 och har sin hemvist i Irland.

Investeringsmål

Att försöka förse investerare med resultatet av MSCI EM ex China Climate Paris Aligned Index (indexet), minus fondens avgifter och utgifter, samtidigt som man strävar efter att minimera tracking error mellan fondens nettotillgångsvärde och index.

Handla AXQE ETF

AXA IM MSCI Emerging Markets ex-China Equity PAB UCITS ETF EUR Hedged Acc (AXQE ETF) är en europeisk börshandlad fond. Denna fond handlas på flera olika börser, till exempel Deutsche Boerse Xetra.

Det betyder att det går att handla andelar i denna ETF genom de flesta svenska banker och Internetmäklare, till exempel  Nordnet, SAVR, DEGIRO och Avanza.

Börsnoteringar

BörsValutaKortnamn
XETRAEURAXQE
gettexEURAXQE

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iShares € Corp Bond Enhanced Active UCITS ETF börjar handlas på Xetra och Frankfurtbörsen

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iShares € Corp Bond Enhanced Active UCITS ETF förvaltas aktivt och investerar främst i euro-denominerade räntebärande värdepapper med investeringsgrad från utvecklade marknadsföretag. Upp till 20 procent av tillgångarna kan placeras i obligationer från tillväxtmarknader.

iShares € Corp Bond Enhanced Active UCITS ETF förvaltas aktivt och investerar främst i euro-denominerade räntebärande värdepapper med investeringsgrad från utvecklade marknadsföretag. Upp till 20 procent av tillgångarna kan placeras i obligationer från tillväxtmarknader.

NamnISIN
kortnamn
AvgiftUtdelnings-
policy
iShares € Corp Bond Enhanced Active UCITS ETF EUR (Acc)IE000BUIVY49
EUEB (EUR)
0,20%Ackumulerande

Produktutbudet inom Deutsche Börses ETF & ETP-segment omfattar för närvarande totalt 2 398 ETFer, 198 ETCer och 255 ETNer. Med detta urval och en genomsnittlig månatlig handelsvolym på mer än €21 miljarder är Xetra den ledande handelsplatsen för ETFer och ETPer i Europa.

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Michael Saylor’s bold Bitcoin bet and Strategy’s risk analysis

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Michael Saylor’s bold Bitcoin bet and Strategy’s risk analysis Bitcoin price technical analysis: Where are the liquidation levels?
  • Michael Saylor’s bold Bitcoin bet and Strategy’s risk analysis
  • Bitcoin price technical analysis: Where are the liquidation levels?
  • What are real-world assets and why do we need tokenization?

Michael Saylor’s bold Bitcoin bet and Strategy’s risk analysis

Strategy (formerly MicroStrategy) has amassed a staggering $43 billion in Bitcoin, positioning itself at the forefront of the corporate “reserve race.” Under the leadership of Bitcoin maximalist Michael Saylor, the company now boasts an $84 billion market cap. But with such an aggressive strategy, how sustainable is its approach—and what risks lie ahead? We break it down in today’s analysis.

Bitcoin price technical analysis: Where are the liquidation levels?

A drop below $72,000 could flush longs, while a breakout above $90,000 may squeeze shorts. One key positive indicator is that Bitcoin continues to print higher lows since March 10, which preserves a bullish market structure in our view. Dive into our technical analysis.

What are real-world assets and why do we need tokenization?

Imagine owning a slice of a skyscraper or a piece of fine art with just a few clicks. Tokenization, the act of converting ownership rights to real-world assets (RWAs) into tradable tokens, has surpassed $10 billion in on-chain value, unlocking global 24/7 access to once-exclusive markets with liquidity, efficiency, and yield. Find out how it works.

Research Newsletter

Each week the 21Shares Research team will publish our data-driven insights into the crypto asset world through this newsletter. Please direct any comments, questions, and words of feedback to research@21shares.com

Disclaimer

The information provided does not constitute a prospectus or other offering material and does not contain or constitute an offer to sell or a solicitation of any offer to buy securities in any jurisdiction. Some of the information published herein may contain forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors. The information contained herein may not be considered as economic, legal, tax or other advice and users are cautioned to base investment decisions or other decisions solely on the content hereof.

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