Sugar #11 Futures Market News and Commentary
July NY world sugar #11 (SBN21) on Wednesday closed up +0.26 (+1.58%), and Aug London white sugar #5 (SWQ21) closed up +4.90 (+1.17%).
Sugar prices on Wednesday posted moderate gains. Sugar rallied on strength in crude oil, which climbed to a new 2-1/2 year high Wednesday. Strength in crude oil benefits ethanol prices and may prompt Brazil’s sugar mills to divert more cane crushing toward ethanol production rather than sugar production, this reducing sugar supplies.
Expectations for smaller Brazil Center-South sugar production are also favorable for prices with the consensus for Brazil Center-South first half of Jun sugar-cane crush of 40.2 MMT and sugar production at 2.55 MMT. The sugar production data by Unica will be released on Thursday.
Sugar prices also have support from strength from the Brazilian real (^USDBRL), which rose to a 1-year high against the dollar on Wednesday. The stronger real discourages export selling by Brazil's sugar producers.
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