White Sugar #5 Futures Market News and Commentary
March NY world sugar #11 (SBH22) on Thursday closed down -0.14 (-0.73%), and March London white sugar #5 (SWH22) closed down -2.80 (-0.55%).
Sugar prices on Thursday gave up an early advance and closed moderately lower. Sugar prices on Thursday initially moved higher, with NY sugar posting a 3-week high and London sugar posting a 1-1/2 month high. A rally in Feb WTI crude (CLG2) on Wednesday to a 7-1/4 year high was supportive for sugar. However, crude prices on Thursday gave up early gains and turned lower, which sparked long liquidation in sugar. Higher crude 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.
Strength in the Brazilian real (^USDBRL) is also bullish for sugar prices as the real on Thursday rallied to a 3-1/2 month high against the dollar. A stronger real discourages export selling from Brazil's sugar producers.
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