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Sugar #16 January 2014 (SDF14)

20.50s-0.24 (-1.16%) 7:11P EDT (ICEUS)
Commodity Price Quote as of Thursday, May 23rd, 2013 View Help

Contract Specifications

Symbol SD
Name Sugar #16 (SF)
Exchange ICEUS
Trading Months January, March, May, July, September, November (F, H, K, N, U, X)
Trading Unit 112,000 pounds (50 long tonnes)
Tick Size 0.01 cents per pound ($11.20 per contract)
Daily Limit None
Trading Hours 8:00a.m. - 1:00p.m. CST
Last Trading Day Eighth calendar day of the month preceding the delivery month
Value of one futures unit $1,120
Value of one options unit $1,120

CRB Yearbook Description

The white crystalline substance called "sugar" is the organic chemical compound sucrose, one of several related compounds all known as sugars. These include glucose, dextrose, fructose, and lactose. All sugars are members of the larger group of compounds called carbohydrates and are characterized by a sweet taste. Sucrose is considered a double sugar because it is composed of one molecule of glucose and one molecule of fructose. While sucrose is common in many plants, it occurs in the highest concentration in sugarcane (Saccharum officinarum) and sugar beets (Beta vulgaris). Sugarcane is about 7 to 18 percent sugar by weight while sugar beets are 8 to 22 percent.

Sugarcane is a member of the grass family and is a perennial. Sugarcane is cultivated in tropical and subtropical regions around the world roughly between the Tropics of Cancer and Capricorn. It grows best in hot, wet climates where there is heavy rainfall followed by a dry season. The largest cane producers are Florida, Louisiana, Texas, and Hawaii. On a commercial basis, sugarcane is not grown from seeds but from cuttings or pieces of the stalk.

Sugar beets, which are produced in temperate or colder climates, are annuals grown from seeds. Sugar beets do best with moderate temperatures and evenly distributed rainfall. The beets are planted in the spring and harvested in the fall. The sugar is contained in the root of the beet, but the sugars from beets and cane are identical. Sugar beet production takes place mostly in Europe, the U.S., China, and Japan. The largest sugar beet producing states are Minnesota, Idaho, North Dakota, and Michigan. Sugar beets are refined to yield white sugar and very little raw sugar is produced.

Sugar beets and sugarcane are produced in over 100 countries around the world. Of all the sugar produced, about 25% is processed from sugar beets and the remaining 75% is from sugar cane. The trend has been that production of sugar from cane is increasing relative to that produced from beets. The significance of this in that sugarcane is a perennial plant while the sugar beet is an annual, and due to the longer production cycle, sugarcane production and the sugar processed from that cane, may not be quite as responsive to changes in price.

Sugar futures are traded on the Bolsa de Mercadorias & Futuros (BM&F), Kansai Commodities Exchange (KANEX), the Tokyo Grain Exchange (TGE), the NYSE-LIFFE exchange in London, and the ICE Futures U.S. (ICE) exchange. Options are traded on the BM&F, the TGE, the NYSE-LIFFE and the ICE.

Raw sugar is traded on the ICE Futures U.S. (ICE) exchange while white sugar is traded on the NYSE-LIFFE exchange in London. The most actively traded contract is the No. 11 (World) sugar contract at the ICE. The No. 11 contract calls for the delivery of 112,000 pounds (50 long tons) of raw cane centrifugal sugar from any of 28 foreign countries of origin and the United States. The ICE also trades the No. 16 sugar contract (Domestic), which calls for the delivery of raw centrifugal cane sugar in the United States. Futures on white sugar are traded on the NYSE-LIFFE and call for the delivery of 50 metric tons of white beet sugar, cane crystal sugar, or refined sugar of any origin from the crop current at the time of delivery.

Prices - World sugar prices on the ICE No.11 sugar nearest-futures chart rallied early in 2011 and posted a 31-year high of 36.08 cents per pound in February after the ISO forecast a 1.7% increase in 2011 global sugar demand that cut the inventory-to-consumption ratio to a 20-year low of 32%. Reduced sugar output in Australia, the world's third-largest sugar exporter, also underpinned prices after floods and cyclones cut its 2011 output to a 9-year low of 3.58 MMT. Sugar prices then collapsed into late-spring and posted a 1-1/4 year low of 20.40 cents a pound in May 2011 after the ISO hiked its 2010/11 global sugar surplus estimate to 1 MMT on higher output from Thailand and forecast a 4 MMT global sugar surplus in 2011/12 on increased sugar production in Brazil and India. Sugar prices rebounded sharply to a 1-year high of 31.85 cents a pound in August 2011 after the USDA forecast record global sugar consumption in 2011/12 of 162 MMT along with export delays in Brazil where as many as 75 vessels were waiting to load sugar, the longest wait in 2 years. Prices faded into year-end after India allowed another 1 MMT of sugar exports and the ISO raised its 2011/12 global sugar production estimate to a record 172.4 MMT. Sugar prices finished 2011 down -27% at 23.30 cents per pound.

Supply - World production of centrifugal (raw) sugar in the 2011-12 marketing year (Oct 1 to Sep 30) rose +4.2% to 168.247 million metric tons, a new record high. The world's largest sugar producers in 2011-12 were Brazil with 21.3% of world production, India with 16.8%, and the European Union with 10.0%. U.S. centrifugal sugar production in 2011-12 rose +36.5% to 2.300 million metric tons. World ending stocks in 2011-12 rose +1.8% to 30.018 million metric tons. The stocks/consumption ratio fell -0.3% in 2011-12 to 18,800 metric tons. U.S. production of cane sugar in 2011-12 rose +5.5% to 3.345 million short tons and beet sugar production fell -2.9% yr/yr to 4.525 million short tons.

Demand - World domestic consumption of centrifugal (raw) sugar in 2011-12 rose by +2.8% yr/yr to 159.320 million metric tons, below last year's record high of 156.080 million metric tons. U.S. domestic disappearance (consumption) of sugar in 2011-12 rose by +0.5% yr/yr to 11.615 million short tons. U.S. per capita sugar consumption in 2010-11 (latest data) rose +3.9% to 65.98 pounds per year, which is only about two-thirds of the levels seen in the early 1970s.

Trade - World exports of centrifugal sugar in 2011-12 rose +1.0% yr/yr to 56.694 million metric tons, a new record high. The world's largest sugar exporter was Brazil, where exports in 2011-12 fell -7.8% yr/yr to 23.800 million metric tons, which accounted for 42.0% of total world exports. The next largest exporters are Thailand with 15.4% of world exports and Australia with 5.2%. U.S. sugar exports in 2011-12 fell -19.4% yr/yr to 200,000 short tons, which is down from the 15-year high of 422,000 seen in 2006-07. U.S. sugar imports in 2011-12 fell -6.6% yr/yr to 3.135 million short tons, down from the decade high of 3.355 in 2010-11.

Articles from the Commodity Research Bureau (CRB) Commodity Yearbook. The single most comprehensive source of commodity and futures market information available, the Yearbook is the book of record of the Commodity Research Bureau, which is, in turn, the organization of record for the commodity industry itself. Its sources - reports from governments, private industries, and trade and industrial associations - are authoritative, and its historical scope is second to none. Additional information can be found at www.crbyearbook.com.
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