October NY world sugar #11 (SBV25) right this moment is up +0.21 (+1.29%), and October London ICE white sugar #5 (SWV25) is up +4.40 (+0.93%).
Sugar costs are shifting greater right this moment, with NY sugar posting a 1-week excessive and London sugar posting a 1.5-week excessive. Concern about smaller sugar provides from Brazil is boosting sugar costs. Covrig Analytics mentioned final Friday that studies of smaller cane yields from Brazil’s sugar farmers could knock Brazil’s 2025/26 sugarcane manufacturing under 600 MMT, a lot decrease than Brazilian authorities crop forecasting company Conab’s forecast of 663.4 MMT.
An extreme brief place by funds might exacerbate any short-covering rally in sugar futures. Final Friday’s weekly Dedication of Merchants (COT) information confirmed funds elevated their net-short positions in NY sugar futures by +25,923 positions to 151,004 brief positions within the week ending August 5, essentially the most in nearly 6 years.
Final Tuesday, sugar costs fell to 5-week lows on indicators of stronger sugar manufacturing in Brazil. On July 31, Unica reported Brazil’s Heart-South sugar output within the first half of July rose +15% y/y to three.4 MMT. Additionally, the quantity of sugarcane being crushed for sugar by Brazil’s sugar mills has elevated to 54% from 50% the identical time final 12 months.
The outlook for greater sugar exports from India is damaging for sugar costs after Bloomberg reported that India could allow native sugar mills to export sugar within the subsequent season, which begins in October, as considerable monsoon rains could produce a bumper sugar crop. India’s Meteorological Division reported Tuesday that cumulative monsoon rain in India was 500.8 mm as of August 4, or 4% above regular. Additionally, the Indian Sugar and Bio-energy Producers Affiliation mentioned final Thursday that it’s going to search permission to export 2 MMT of sugar in 2025/26.
The outlook for greater sugar manufacturing in India, the world’s second-largest producer, is bearish for costs. On June 2, India’s Nationwide Federation of Cooperative Sugar Factories projected that India’s 2025/26 sugar manufacturing would climb +19% y/y to 35 MMT, citing bigger planted cane acreage. That will observe a -17.5% y/y decline in India’s sugar manufacturing in 2024/25 to a 5-year low of 26.2 MMT, in accordance with the Indian Sugar Mills Affiliation (ISMA).
Sugar costs have retreated over the previous 4 months, with NY sugar falling to a 4.25-year low final month and London sugar sliding to a 4-year low, pushed by expectations of a sugar surplus within the 2025/26 season. On June 30, commodities dealer Czarnikow projected a 7.5 MMT international sugar surplus for the 2025/26 season, the biggest surplus in 8 years. On Might 22, the USDA, in its biannual report, projected that international 2025/26 sugar manufacturing would enhance by +4.7% y/y to a file 189.318 MMT, with international sugar ending shares at 41.188 MMT, up 7.5% y/y.
Indicators that the current slide in sugar costs to 4-year lows has sparked a pickup in demand are optimistic for sugar costs. China’s June sugar imports soared by 1,435% to 420,000 MT. Additionally, Coca-Cola agreed to make use of cane sugar in Coke drinks offered within the US as a substitute of high-fructose corn syrup, which might increase US sugar consumption by +4.4% to 11.5 MMT from 11 MMT at the moment, in accordance with Bloomberg Intelligence.
Sugar costs even have help from decreased sugar manufacturing in Brazil. Unica reported final Thursday that the cumulative 2025/26 Brazil Heart-South sugar output via mid-July fell by -9.2% y/y to fifteen.655 MMT. Final month, Conab, Brazil’s authorities crop forecasting company, mentioned 2024/25 Brazil sugar manufacturing fell by -3.4% y/y to 44.118 MMT, citing decrease sugarcane yields resulting from drought and extreme warmth.
The outlook for greater sugar manufacturing in Thailand is bearish for sugar costs. On Might 2, Thailand’s Workplace of the Cane and Sugar Board reported that Thailand’s 2024/25 sugar manufacturing rose +14% y/y to 10.00 MMT. Thailand is the world’s third-largest sugar producer and the second-largest exporter of sugar.
The Worldwide Sugar Group (ISO) raised its 2024/25 international sugar deficit forecast to a 9-year excessive of -5.47 MMT on Might 15, up from a February forecast of -4.88 MMT. This means a tightening market following the 2023/24 international sugar surplus of 1.31 MMT. ISO additionally minimize its 2024/25 international sugar manufacturing forecast to 174.8 MMT from a February forecast of 175.5 MMT.
The USDA, in its bi-annual report launched Might 22, projected that international 2025/26 sugar manufacturing would climb +4.7% y/y to a file 189.318 MMT and that international 2025/26 human sugar consumption would enhance +1.4% y/y to a file 177.921 MMT. The USDA additionally forecasted that 2025/26 international sugar ending shares would climb +7.5% y/y to 41.188 MMT. The USDA’s Overseas Agricultural Service (FAS) predicted that Brazil’s 2025/26 sugar manufacturing would rise +2.3% y/y to a file 44.7 MMT FAS predicted that India’s 2025/26 sugar manufacturing would rise +25% y/y to 35.3 MMT resulting from favorable monsoon rains and elevated sugar acreage. FAS predicted that Thailand’s 2025/26 sugar manufacturing will climb +2% y/y to 10.3 MMT.
On the date of publication, Wealthy Asplund didn’t have (both instantly or not directly) positions in any of the securities talked about on this article. All info and information on this article is solely for informational functions. This text was initially printed on Barchart.com
