Sugar prices continued their recent slide, ending lower for a fourth session as traders looked to a larger-than-expected production in Brazil, the world's largest growing region.
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Raw sugar for July lost 0.5% to 13.72 cents a pound on the ICE Futures U.S. exchange.
While sugar production is well behind last year's unusually swift start in Brazil, the Brazilian Sugarcane Industry Association is predicting that sugar production will only decline marginally from the previous year's record level. Last year, many cane mills continued crushing straight through a usual break time between seasons in order to take advantage of high prices. As a result, prices for sugar have dropped 30% compared with a year ago.
"Although the risks for this forecast are now increasing, the season is still young and processing could yet catch up. The fall in the sugar price below 14 cents per pound again could also bring about lower production," Commerzbank said in a note.
The total volume of sugarcane crushed in the second half of May reached 31.587 million tons, down 2.8% from last year but 2 million tons larger than analysts predicted in a survey by S&P Global Platts.
It was the second time in a month that production numbers have exceeded analyst expectations.
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The report, released Monday, also indicated more cane had been converted to sugar than analysts expected, at 1.754 million tons, a 4% increase over the same period last year and 160,000 tons more than analysts anticipated.
The increased sugar production was a result of producers converting a larger amount of cane to sugar production than analysts anticipated, with 47.95% of cane converted to sugar rather than ethanol, a 6% increase over last year. The increase came even with eight fewer mills operating than at the same time last year.
Price Futures Group warned that demand for sugar could soon see a short-term increase as Ramadan ends, which could provide buying interest for restocking in Muslim countries. Ramadan ends the evening of June 24.
In other markets, cocoa for September rose 0.9% to settle at $2,075 a ton, arabica coffee for July was down 0.7% to end at $1.2555 a pound, frozen concentrated orange juice for July lost 0.6% to close at $1.4025 a pound and July cotton fell 1.3% to end at 73.50 cents a pound.
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(END) Dow Jones Newswires
June 14, 2017 17:20 ET (21:20 GMT)