Login ID:
Partner Login
Contact Us : 7066511911

Weekly: ICE Sugar clock second consecutive week of gains; scales fresh 1-month peak on supply worries

13 Aug 2022 1:13 pm
 Comments 0 Comments  |  Comments Post Comment  |  Font Size A A A 

Mumbai, 13 Aug (Commoditiescontrol): ICE sugar futures mustered enough support not only to scale a fresh one-month peak, but also clocking second consecutive week of gains, thanks to the spirited technical buying that was created by supply worries in Europe due to heat wave.

ICE October raw sugar ​rose 0.11 cent, or 0.6%, at 18.60 cents per lb, having hit a three-week high of 18.65. October London white sugar rose $5.00, or 0.9%, to $560.10 a tonne.

ICE raw sugar futures rallied 3.67% for the week and are up almost 6% during the month so far. As dealers have pointed out, sugar was gaining support from fund short-covering against a backdrop of improved macroeconomic signals, with investors scaling back views on how far U.S. interest rates and inflation can climb.

The technical-led buying seems to have ignored cautious report from the U.S. Department of Agriculture (USDA) released on Friday. The agency increased its projection for sugar supplies in the United States after reporting a higher amount of sugar imports as well as better local production.

Bullish factor...

A lack of recent rain in several sugar-growing regions worldwide is supportive of sugar prices. Maxar Technologies recently said that hot and dry conditions in France and Germany threaten to lower sugar beet yields in the European Union, and that India's sugarcane around the Ganges River Basin received below-normal rainfall in June and July.

Also, the smaller Brazil sugar production is bullish for prices after Unica reported July 27 that Brazil 2022/23 Center-South sugar production through mid-July was 12.661 MMT, down 17.4% on year, with the sucrose content per ton of crushed sugar cane down 3.3% on year at 130.45 kg per ton.

Bearish factor...

As regards bearish factor, the biggest set back was received on Wednesday, when Unica reported that Brazil's Center-South sugar output in the second half of July rose 8.4% on year to 3.302 MMT. However, Center-South crop output in the 2022/23 marketing year through the end of July was down 13.0% on year to 15.974 MMT. In addition to production, the softness of Brazilia real is a big negative. Sugar prices Thursday were undercut by a -1.20% sell-off in the Brazilian real versus the dollar, which encourages export sales by Brazil's sugar producers.

The sweetener received another jolt from USDA on Friday. In its monthly supply and demand report, the USDA projected U.S. sugar total supply for the 2022/23 season that starts in October at 14.48 million short tonnes (ST), an increase of 250,000 ST from July. With that, the stocks-to-use ratio went up to 14.3% from 12.4%.

Meanwhile, speculators increased their net short position in futures of raw sugar on ICE U.S. in the week to Aug. 9, data from the Commodity Futures Trading Commission (CFTC) showed on Friday. Funds added 4,121 contracts to their bearish bet in raw sugar, taking their net short position in the sweetener to 71,509 lots.

Sugar prices have recently been undercut as India said it would allow additional sugar exports. India's government last Friday confirmed that it would allow a further 1.2 MMT of sugar exports for the year ending September 30 to help India's sugar mills from defaulting on export contracts. That would be on top of the current quota of 10 MMT for a total of 11.2 MMT of sugar exports.

The outlook for larger sugar crop sizes in India and Thailand is bearish for sugar prices. On April 15, the ISMA raised India's 2021/22 sugar production estimate to 35 MMT from 33.3 MMT, up 12.2% on year, and said sugar exports would jump to a record 9 MMT. India is the world's second-largest sugar producer. The Indian Sugar Mills Association (ISMA) recently reported that India's 2021/22 sugar production from Oct 1-May 15 rose 14.4% on year to 34.88 MMT. Meanwhile, Thailand's Office of the Cane & Sugar Board estimated that Thailand would export 7 MMT of sugar this (2021/22) marketing year. Thailand is the world's second-largest sugar exporter.

ICE October futures would find support at 18.44 cents and meet resistance near 18.70 cents.

(By Commoditiescontrol Bureau: +91-22-40015505)

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

   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 Special Reports
Weekly: ICE raw sugar snap two straight week of gains o...
Weekly: ICE raw sugar futures post 2nd straight weekly ...
Around 308 mills in operation produce 19.9 lakh tonnes...
Weekly: ICE raw sugar extend rise for 5th straight week...
Weekly: ICE raw sugar post 3rd straight weekly gain on ...
Top 5 News
Weekly: ICE raw sugar snap two straight week of gains o...
US soybean net export sales for Nov 11-17 down noticea...
US Cotton net export sales reductions for Nov 11 -17 at...
Castor Oil (Kadi) Bullish Price Trend / Next Resistan...
Akola Desi Tur (Pigeon Pea) Trending Higher / Next Re...
Top 5 Market Commentary
Burma Urad & Madhya Pradesh Masoor firm at Delhi
Major producing states witness arrival of 97,600 bales ...
Imported Tur declines at Mumbai, Tanzania Chana gain
Burma Urad-Tur prices in $ terms at Chennai
Sugar prices remain nearly steady
Copyright © CC Commodity Info Services LLP. All rights reserved.