NY Sugar Closes Higher on Short-Covering

October NY world sugar #11 (SBV22) on Tuesday closed +0.09 (+0.51%), and Oct London white sugar #5 (SWV22) closed -1.80 (-0.34%).

NY sugar prices on Tuesday rallied on some short-covering after the sharp decline in the latter half of July that produced a 1-year low on Monday.  

Sugar prices on Tuesday were undercut by a sharp -1.6% sell-off in the Brazilian real versus the dollar (^USDBRL), which encourages export sales by Brazil's sugar exporters.

Smaller Brazil sugar production is bullish for prices after Unica reported last Wednesday that Brazil 2022/23 Center-South sugar production through mid-July was 12.661 MMT, down -17.4% y/y, with the sucrose content per ton of crushed sugar cane down -3.3% y/y at 130.45 kg per ton.  

Sugar prices have recently been undercut by concern that India might allow additional sugar exports.  A report from Bloomberg on July 20 said that India's government is considering allowing additional export sales of 1.0-1.2 MMT of sugar exports for the year ending September 30 to help India's sugar mills from defaulting on export contracts.  That would be on top of the current quota of 10 MMT of sugar exports.

The outlook for larger sugar crop sizes in India and Thailand is bearish for sugar prices.  On April 15, the ISMA raised India's 2021/22 sugar production estimate to 35 MMT from 33.3 MMT, up +12.2% y/y, and said sugar exports would jump to a record 9 MMT.  India is the world's second-largest sugar producer.  The Indian Sugar Mills Association (ISMA) recently reported that India's 2021/22 sugar production from Oct 1-May 15 rose +14.4% y/y to 34.88 MMT.  Meanwhile, Thailand's Office of the Cane & Sugar Board estimated that Thailand would export 7 MMT of sugar this (2021/22) marketing year.  Thailand is the world's second-largest sugar exporter.

A bearish factor for sugar was the projection from Conab on April 27 for Brazil 2022/23 sugar production to increase by +15% y/y to 40.3 MMT as the crop recovers from the past season's adverse weather.  Also, the USDA's FAS on April 22 projected Brazil's 2022/23 sugar production would climb +2.9% y/y to 36.37 MMT and that 2022/23 Brazil sugar exports would increase by +3.7% y/y to 26.6 MMT.
 

• Coffee Sees Weakness on Strong Exports
• Barchart Crop Production Forecasts for Canadian Spring Wheat and Soybean Estimates Remain Unchanged
• Barchart Forecasts Decrease in US Corn and Soybeans Production and Yield in August 2022 Report
• Arabica Coffee Sees Weakness on Strong Exports