Sugar #16 Futures Market News and Commentary
March NY world sugar #11 (SBH22) on Tuesday closed down -0.03 (-0.16%), and March London white sugar #5 (SWH22) closed down -0.50 (-0.10%).
Sugar prices on Tuesday closed slightly lower. However, sugar prices recovered almost all their losses Tuesday after crude oil prices rose more than +2%. Higher crude oil prices benefit ethanol prices and may prompt Brazil's sugar mills to divert more cane crushing toward ethanol production rather than sugar, thus curbing sugar supplies.
Reduced sugar output in Brazil is bullish for prices after Unica reported Jan 12 that 2021/22 Center-South sugar production through Dec was 32.029 MMT, down -16.14% y/y. Also, the sugar content in the sugarcane crushed fell -1.55 y/y to 142.92 kg/ton from 145.17 kg/ton a year earlier.
Sugar has underlying support from the recent damage to Brazil's sugar crops from frost and drought. Conab, on Nov 23, cut its Brazil 2021/22 sugar production estimate to 33.9 MMT from an Aug forecast of 36... Read more