March NY world sugar #11 (SBH23) on Friday closed down -0.08 (-0.41%), and March London white sugar #5 (SWH23) closed up +0.80 (+0.15%).
Sugar prices Friday erased an early rally and settled mixed. Â A slump in crude prices weighed on sugar after crude prices (CLF23) Friday fell to a 1-year low. Â Weak crude prices undercut ethanol prices and may prompt Brazil's sugar mills to divert more cane crushing toward sugar production rather than ethanol, thus boosting sugar supplies.
A large long position by commodity funds of London white sugar futures could prompt long liquidation pressure. Â Friday's weekly Commitment of Trades (COT) report showed funds boosted their net-long London white sugar positions by +1,500 in the week ending Dec 6 to a 3-year high of 32,999 positions.
A supportive factor for sugar is smaller sugar production in Europe, which may force European sugar and food manufacturers to import sugar, leading to tighter global supplies. Â The European Association of Sugar Manufacturers Thursday forecasted that EU 2022/23 sugar output will fall -7% y/y to 15.5 MMT.
Sugar prices were undercut last Thursday when StoneX boosted its global 2022/23 sugar surplus estimate to 5.2 MMT from a Sep estimate of 3.9 MMT. Â StoneX also predicts Brazil's 2023/24 Center South sugar production will climb +5.2% y/y to 35.6 MMT.
Increased sugar production in Brazil is bearish for prices after Unica reported Nov 25 that Brazil's Center-South sugar output in the 2022/23 marketing year through mid-November rose +0.3% y/y to 31.966 MMT. Â Also, the Organization of Cane Producers Association in Brazil forecasted last Monday that Brazil's sugar output in 2022/23 at 36.9 million metric tons due to favorable weather and that production would reach 37.2 million metric tons in 2023/24.
Higher sugar output in India is bearish for prices. Â On Oct 24, the India Sugar Mills Association ISMA forecasted that India's 2022/23 sugar production (Oct 1-Sep 30) would climb +2% y/y to 36.5 MMT as Indian farmers boosted their planted cane acreage by +5.4% y/y to 5.6 mln hectares. Â In 2021/22, India's sugar production rose +2.9% y/y to 35.8 MMT. Â Also, robust sugar exports from India are bearish for prices after India 2021/22 sugar exports jumped +57% y/y to a record 11 MMT. Â Last Friday, (ISMA) reported that India's Oct-Nov sugar production rose +1.5% y/y to 4.79 MMT.
In a bearish factor, the International Sugar Organization (ISO) on Nov 22 projected that global 2022/23 sugar production would climb +5.5% y/y to a record high of 182.1 MMT. Â Also, ISO projected that the 2022/23 global sugar market would be in a surplus of +6.2 MMT.
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More Sugar News from Barchart
- Arabica Coffee Falls on Brazil Rain and Rebound in ICE Inventories
- Arabica Coffee Rebounds as Dollar Weakness Sparks Short Covering
- Cocoa Prices Jump as ICE-Inventories Fall
- Sugar Posts Moderate Gains on Lower EU Sugar Output
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.
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