Weekly report on ICE sugar 6th September to 10th September

Weekly report on ICE sugar

6th September to 10th September

Weekly: ICE raw sugar futures edge lower amid increased Brazil sugar production

Mumbai (Commoditiescontrol): ICE raw sugar futures edged lower this week amid increased Brazil sugar production. Unica showed Brazil's centre-south sugar production rising 0.7 percent late in August, but said the crop will end ahead of time, as soon as October.

The most active October contract closed with loss of 83 points at 18.79 cents per lb. The March contract settled lower by 81 points at 19.51 cents per lb last trading session on Friday.

Global sugar prices fell sharply on better than expected Sugar production in CS Brazil amidst lesser fall in ATR content. Market was expecting more fall in ATR content due to recent frost activity but as per the recent crushing update ATR content fall was minimal which pressurized the sugar prices in the global market. Raw and Whites Sugar prices fell by 4.0% and 3.8% respectively during the week.

Moreover, consistent rains in over major cane growing regions also weighed on the sugar prices in the global market. There rains will aid carry out planting activity and to improve the crop growth and development for late harvest cane as well as next season crop. During the last week, raw sugar prices are settled lower by 4.0% at 19.51 c/lb and whites sugar was down by 3.8% at USD 487.6 per MT.

CS Brazil Crushing Update:

Cane crushing was reported at 43.13 MMT, higher by 2.1% y/y on drier weather during second fortnight of Aug. Sugar production was in line with market expectation of 2.95 MMt while ATR content was reported to be higher as compared to market anticipation of around 153-153.5 kg/MT which led to shaper correction in prices in global prices.

White premium corrected during the week on lesser demand for whites on COVID concern in EU, US and Asian nations. With the demand concern for whites likely to remain in the short term is likely to pressure on the white premium in the short term. On the w/w basis white premium is quoting at 57.5 USD per MT versus 58.7 USD per MT of last week. Moving ahead, White premium is likely to be under pressure in the short term.

As per the latest Commitment of Traders report net long positions of non commercials are continued to decline on improvement in crop over CS Brazil. Improvement of weather over cane growing regions of CS Brazil has led to long liquidation by managed money.As per the report managed money was 251,265 contracts net long on 7th September; down 13,050 contracts from the previous week. Long side positions decreased by 11,784 contracts, while short side positions witnessed a rise of 1,266 contracts. The open interest for the week was registered at 1,278,236 vs 1,290,057 contracts last week.

Global Outlook:

Global prices are expected to take support around 19.4 c/lb and likely to trade firmer in the coming week. Expected lower production in CS Brazil is likely to keep prices supported in the long run.

Immediate support and resistance for Sugar #11 (Mar) lies at 19.4 and 20.4 cents per lb, respectively.

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