Login ID:
Password:
Partner Login
Contact Us : 7066511911

ICE raw sugar futures gain as heavy rain forecast in Brazil trigger short covering

5 Oct 2023 8:32 am
 Comments 0 Comments  |  Comments Post Comment  |  Font Size A A A 

Mumbai, 5 Oct (Commoditiescontrol): ICE raw sugar futures settled higher on Wednesday, as heavy rain forecast in Brazil and several countries facing crop problems seen tightening supplies and hence triggered short covering.

ICE sugar futures for March delivery settled up 0.26 cents, or 1% at 25.93 cents per lb. The October contract expired on Friday with a record delivery of 2.87 million metric tons, which is usually seen as bearish.

December London white sugar added $2.10, or 0.3%, at $691.20 a tonne. The contract ended 3.41% lower last week.

Trader Czarnikow on Wednesday projected there would be a global deficit of 3.2 million metric tons in the 2023/24 season.

Short covering emerged in sugar futures Wednesday after Rural Clima Meteorlogia said Brazil's top sugar cane growing areas should receive frequent rains through October, fueling concern that the heavy will slow the pace of sugar cane crushing and reduce sugar output.

Weakness in the Brazilian real is bearish for sugar prices after the real on Wednesday fell to a 6-month low against the dollar. The weaker real encourages export selling from Brazil's sugar producers.

Sugar prices Wednesday fell back from their best levels after crude oil prices plunged more than 5% to a 5-week low. Weakness in crude undercuts ethanol prices and may prompt sugar mills worldwide to divert more sugar cane crushing toward sugar production rather than ethanol.

Meanwhile, the sugar market was set to remain tight in the upcoming 2023/24 season, partly due to a potential drop in output in Asia linked to the El Nino weather phenomenon. Production in Brazil, however, remains near record this season with another mostly dry fortnight late in September. Monsoon rainfall in India fell to its lowest since 2018 this year amid the El Nino weather pattern.

Last Tuesday, Unica reported that Brazil Center-South sugar output in the first half of September rose 8.5% on year to 3.116 MMT and that sugar output in the 2023/24 crop year through mid-September rose 18.7% on year to 29.258 MMT. Also, 49.37% of the crushed sugarcane was used for sugar production this year, an increase from 45.47% last year.

Elsewhere, Europe's sugar beet growers are turning away from the crop as the European Union's environmental rules clash with efforts to stem food inflation and secure supplies.

On September 5, Alvean, the world's largest sugar trader, said it expects a 2023/24 global sugar deficit of 5.4 MMT, the sixth year of shortages, as India may curb sugar exports and Thailand farmers plant more profitable cassava instead of sugarcane.

A negative factor for sugar is reduced demand from China after China's August sugar imports tumbled 46.4% on year to 370,000 MT. Meanwhile, China will continue to hold further auctions of its sugar reserves in the near future to ensure the stability of domestic price and supply, the state's reserve management centre said in a notice on Tuesday.

Speculators reduced their bullish bets in futures of raw sugar in the week to Sept. 26, the CFTC said.

For Thursday, support for the March Sugar contract is at 25.38 cents and 24.84 cents, with resistance at 26.37 cents and 26.28 cents.

(By Commoditiescontrol Bureau: 09820130172)


       
  Rate this story 1 out of 52 out of 53 out of 54 out of 55 out of 5 Rated
0.0

   Post comment
Comment :

Note : This forum is moderated. We reserve the right to not publish and/or edit the comment on the site, if the comment is offensive, contains inappropriate data or violates our editorial policy.
Name :  
Email :  
   

Top | Post Comment  

Latest Market Commentary
Malaysia Rubber Physical Prices (Sen/Kg) 08 Decembe...
Thailand Rubber F.O.B. Offer Prices 08 December , ...
Kottayam/Kochi Rubber Rates 07 December 2023
Malaysia Rubber Physical Prices (Sen/Kg) 07 December...
Bangkok/kualalumpur Rubber Rates 07 December , 2023
more
Top 5 News
Long/Short Quantity Position In NCDEX Castor seed on 7t...
Copper Prices Climb on Strong Chinese Export Data, Sign...
Soy Oil Rallies as Argentina's SoyDollar Scheme Nears E...
NCDEX Stock position of commodities at NCCL approved wa...
DCE Oil Complex Mid Day Closing 08 Dec 2023
Top 5 Special Reports
US cotton net export sales for Nov 24-30 at 116,400 RB,...
US soybean net sales for Nov 24-30 at 1,517,600 MT, dow...
Desi Moong (Jaipur) Trading Near Key Support (Rs. 8,3...
Rajkot Groundnut Oil Loose Correction Underway / Next...
Baltic Dry Index Soars to 18-Month High Amid Global Shi...
Copyright © CC Commodity Info Services LLP. All rights reserved.