White Sugar #5 Futures Market News and Commentary
Oct NY world sugar #11 (SBV19) on Thursday closed up by +0.19 (+1.67%), and Oct ICE London white sugar #5 (SWV19) closed up by +4.20 (+1.36%). Sugar prices pushed higher Thursday on short-covering after Conab cut its Brazil 2019/20 sugar production estimate by -6.7% to 31.8 MMT from a May estimate of 34.1 MMT. Sugar prices on Tuesday posted 2-week lows on the outlook for robust sugar production in India, the world's second-largest sugar producer. Researcher Marex Spectron said Monday that beneficial weather could boost India 2019/20 sugar production to 30 MMT, which would be 6% higher than the 28.2 MMT estimate from the Indian Sugar Mills Association. Ample monsoon rains in India should benefit India's sugar crop after India's Meteorological Department on Aug 8 said India's July monsoon rains were 298.4 mm, 4.6% more than the long-term average. Sugar has support from Unica data on Aug 5 that showed sugar production in Brazil's Center-South region in the second half of July fell by -5.5% y/y to 2.478 MMT, with cumulative production in the 2019-20 marketing year through July falling -9.9% y/y to 13.334 MMT. Another positive for sugar was the action by India's cabinet on July 24 to create a buffer stock of 4 million MT of sugar for 1-year starting Aug 1 in an attempt to lock up supply and support domestic sugar prices.