Sugar #11 May '19 (SBK19)

by cmdtyNewswires - 2 minutes ago
May NY world sugar #11 (SBK19) this morning is up +0.11 (+0.83%) and May ICE London white sugar (SWK19) is up +2.20 (+0.62%). Sugar prices are higher this morning on the heels of a rally in crude oil to a 3-1/4 month high. Higher crude prices benefits ethanol prices, which may prompt Brazil's sugar mills to divert more cane crushing toward ethanol production rather than sugar production, thus curbing sugar supplies. Also, strength in the Brazilian real against the dollar this morning is supportive for sugar prices since that discourages exports from Brazil's sugar producers. May NY sugar rallied to a 3-1/2 month high and May London sugar rose to a 1-month high Wednesday after the Brazilian real rallied to a 2-week high against the dollar. Also, increased demand from Indonesia, the world's largest sugar importer, fueled fund buying of sugar after Indonesia's Sugar Refiners Association said Tuesday that refiners may import 3.2 MMT of raw sugar in 2019, up +5.3% y/y. In addition, India's National Federation of Cooperative Sugar Factories Ltd projected on Tuesday that India 2019/20 sugar production will fall by at least -5% y/y to a 3-year low of 30 MMT. Sugar prices have underlying support from Unica's report last Tuesday that Brazil's 2018/19 Center-South sugar production during Oct-Jan was down -26.4% at 26.36 MMT, with 35.4% of cane used for sugar (down from 46.9% last year), and 64.56% of cane used for ethanol production (up from 53.1% last year).