Sugar #11 Futures Market News and Commentary
October NY world sugar #11 (SBV19) on Tuesday closed sharply higher by +0.42 (+3.63%), and Oct ICE London white sugar #5 (SWV19) closed up +3.20 (+1.02%). Oct NY world sugar early Tuesday edged to a new contract low and a 2-month nearest-futures low due to the dollar rally and the news that Chinese sugar imports in June fell sharply by -49.2% y/y to 140,000 MT. However, sugar prices then rallied sharply on heavy short-covering sparked by Bloomberg's release of an analyst survey showing a consensus for Unica within the next few days to report a decline in sugar cane processing in Brazil's Center-South region in the first half of July by -8.2% y/y to 41.5 MMT from 45.2 MMT a year earlier. Unica reported on July 10 that Brazil's 2019/20 Center-South sugar production fell -8.9% y/y to 8.905 MMT in the marketing year through June. Another bullish factor on Tuesday was Datagro's hike in its 2019-20 (Oct/Sep) sugar deficit estimate to 6.42 MMT from June's estimate of 2.71 MMT due to unfavorable weather that reduced crop sizes in India, the EU, Australia, Pakistan, and Thailand. Datagro reduced its 2018-19 (Oct/Sep) sugar surplus estimate to a nominal 140,000 MT from June's forecast of 1.0 MMT. A potential bullish factor for London sugar is last Friday's weekly Commitment of Traders (COT) data that showed funds increased their net short positions of London white sugar by 4,179 contracts in the week ended July 16 to 33,500 contracts, a record short position in data going back to 2011, which increases the threat of a short-covering rally.