Sugar #11 Futures Market News and Commentary

by on 24 June 2019

October NY world sugar #11 (SBV19) on Friday closed down -0.20 (-1.58%) and Aug ICE London white sugar #5 (SWQ19) closed down -7.10 (-2.14%). Sugar prices sold off Friday with Oct NY sugar at a 2-week low and Aug London sugar at a 3-week low. Aug London sugar prices may see some technical weakness after the contract on Friday closed below its 50-day moving average. Sugar prices remain under pressure on threats of increased sugar exports from India and ample supplies from Brazil. The Indian Sugar Mills Association (ISMA) on Jun 14 said it expects to export a record 7 million MT of sugar in 2019/20 to reduce its huge stockpiles, up from 3 million MT in 2018/19. Also, Monday’s comments from the CEO of sugar-producer Copersucar, one of Brazil’s top sugar exporters, weighed on sentiment this week when he said that global sugar inventories are still high and that recent weather in Brazil has benefited fields and encouraged sugar cane plantings. A positive for sugar prices was Friday’s rally in crude oil to a 3-week high, which benefits ethanol prices and may prompt Brazil’s sugar mills to boost ethanol production at the expense of sugar production. Also, Friday’s rally in the Brazilian real to a 2-1/4 month high against the dollar was positive for sugar since the stronger real discourages export selling by Brazil’s sugar producers. Big Picture Sugar Market Factors: Bullish factors for sugar include (1) lower global production after Conab, Brazil’s national crop agency, reported that Brazil 2018/19 sugar output in the marketing year ended March 31 fell -17.2% y/y to an 11-year low of 31.4 MMT, (2) strong demand for ethanol in Brazil that has prompted Brazil’s sugar mills to ramp up ethanol production at the expense of sugar production after Unica reported the percentage of cane crushed for ethanol production rising to a record 65.59% from 65.55% last year and that that Brazil’s Center-South May domestic ethanol sales rose +50.6% y/y to 2.86 bln liters. Bearish factors include (1) Conab’s forecast for Brazil 2019/20 sugar production to climb by +17.4% y/y to 34.1 MMT and that Brazil’s sugar mills will increase their percentage of cane crushing to produce sugar to 39.1% from 34.9% in 2018/19, (2) the USDA’s projection for global 2019/20 sugar production to climb +1% y/y to 180.7 MMT, (3) the projection from the Indian Sugar Mills Association that it expects to export a record 7 million MT of sugar in 2019/20 to reduce its huge stockpiles, up from 3 million MT in 2018/19, and (4) ISO’s forecast that global 2018/19 sugar production rose +0.6% y/y to a record 185.2 MMT and that there was a 2018/19 sugar surplus of 2.2 MMT (vs 2017/18’s 7.3 MMT).

Latest futures price quotes as of Sun, Jun 23rd, 2019.

ContractLastChangeOpenHighLowPreviousVolumeOpen IntTimeLinks
 SBY00 (Cash)12.22s-0.210.0012.2212.2212.500006/21/19
 SBN19 (Jul ’19)12.22s-0.2112.4012.4512.1712.4339,917123,93006/21/19
 SBV19 (Oct ’19)12.48s-0.2012.6712.7212.4212.6870,015458,32306/21/19
 SBH20 (Mar ’20)13.44s-0.1813.5913.6213.3913.6215,841196,42406/21/19
 SBK20 (May ’20)13.53s-0.1813.6813.7013.5013.715,56446,53206/21/19
 SBN20 (Jul ’20)13.62s-0.1713.7513.7813.5913.792,41636,27906/21/19
 SBV20 (Oct ’20)13.79s-0.1413.9013.9313.7713.931,22132,14206/21/19
 SBH21 (Mar ’21)14.31s-0.1114.3914.3914.3114.4246417,42306/21/19
 SBK21 (May ’21)14.29s-0.100.0014.2914.2914.39323,41006/21/19
 SBN21 (Jul ’21)14.26s-0.090.0014.2614.2614.3562,93106/21/19
 SBV21 (Oct ’21)14.33s-0.090.0014.3314.3314.4201,19806/21/19
 SBH22 (Mar ’22)14.63s-0.090.0014.6314.6314.721032706/21/19
 SBK22 (May ’22)14.49s-0.0914.4714.4914.4714.581106/21/19

by cmdtyNewswires – barchart.com