Raw sugar rallies to near 7-month high as Brazil concerns rise
Raw sugar futures on ICE reached their highest level in nearly seven months due to supply concerns in Brazil, the top producer. October raw sugar rose 2.2% to 22.42 cents per pound, with speculators driving the market higher. Brazil’s drought has worsened crop prospects, prompting Wilmar to reduce its sugar production estimate for the country. Meanwhile, coffee prices fell as Brazil’s 2024 crop came in below expectations, and cocoa prices stabilized, benefiting from favorable weather in West Africa.
LONDON, Sept 20 (Reuters) -Raw sugar futures on ICE rallied to their highest in nearly seven months on Friday as speculators rushed to buy following a breach of key technical trade levels that was prompted by escalating worries over supplies in top producer Brazil.
SUGAR
* October raw sugar SBc1 rose 2.2% to 22.42 cents per lb, having hit a high settled up 23.13 cents.
* “Prices (are) now above all key technical indicators (and) speculators have plenty of room to push the market higher,” said Stephen Geldart, associate director of broker and supply chain services provider Czarnikow.
* He noted most analysts think sugar will be under-supplied in the first quarter of next year, and that this week’s price action could open the door for a year-end rally towards 24 cents.
* Trader Wilmar WLIL.SI cut its projection for Brazil’s centre-south sugar production to a range between 38.8 million and 40.8 million metric tons on Thursday from its initial estimate of 42 million tons.
* Brazil is facing its worst drought in history, according to government data.
* The excessive dryness has caused widespread fires, worsened air quality and reduced Amazon river levels to historic lows, and worsened the outlook for both this year’s and next year’s crop.
* December white sugar LSUc1 rose 1.5% to $577.10 a ton, having hit its highest since early July at $588.50.
COFFEE
* December arabica coffee KCc2 fell 1.6% to $2.5555 per lb, extending the market’s retreat from a 13-year high on Monday.
* Top producer Brazil’s 2024 coffee crop, which farmers have now finished harvesting, has come in 0.5% below last year’s levels and far below a May forecast thanks to drought and high temperatures, national food supply agency Conab said.
* Dealers notes forecasts for below average rains in Brazil’s coffee areas for the rest of the month.
* November robusta coffee LRCc2 fell 0.9% to $5,202 a ton, having hit its highest in nearly 50 years on Monday.
COCOA
* December New York cocoa CCc1 rose 0.4% to $7.782 a ton.
* Cocoa has stabilised at prices well below peaks set in April as generally favourable weather has improved the outlook for the 2024/2025 crops in West Africa.
* March London cocoa LCCc2 rose 0.2% to 4,615 pounds a ton.
Source Link : https://www.xm.com/research/markets/allNews/reuters/raw-sugar-rallies-to-near-7month-high-as-brazil-concerns-rise-53930031
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