Sugar futures moved higher Tuesday as sugar traders and analysts met in New York for "Sugar Week," which has historically led to speculative rallies in sugar.
Raw sugar for July rose 1.4% to 15.59 cents a pound on the ICE Futures U.S. exchange.
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Agrilion Commodity Adviser said in a note that over the last 10 Sugar Weeks in New York, the raw sugar contract has climbed an average of 4.2% to the high during the week "possibly fueled by alcohol and optimistic Brazilian producers talking to traders," the firm said. However, on average, that rally is short-lived with an average gain by the end of the week of about 0.4%, Agrilion noted.
A number of analysts and trade houses are releasing their forecasts for the 2017/2018 crop in Brazil, the world's largest growing region. Tuesday, INTL FCStone lowered its February estimate by 0.1%, saying it expects 588 million tons of sugarcane to be crushed in the Center-South region of Brazil, the largest growing region, about 3.1% less than the 2016/2017 crop.
The firm said sugar production from that cane should total 35.6 million tons, about the same production volume as last year. For the 2016/2017 crop, the firm lowered its estimate for global sugar demand from 184.9 million tons in February to 183.6 million tons, lowering the global deficit to 8.1 million tons from 8.5 million tons in February.
INTL FCStone noted that the 2017/2018 season will be the third straight year in which sugar demand outstrips new supply, with a deficit of 271,000 tons and only a small cushion in global stocks at 63.8 million tons, the lowest level since 2011/12.
Last week, speculators in the sugar market turned bearish on the contract, with the bears outweighing the bulls by 7,501 contracts as of Tuesday, according to the U.S. Commodity Futures Trading Commission.
In other markets, cocoa for July lost 0.1% at $1,954 a ton, arabica coffee for July was off 0.7% at $1.359 a pound, frozen concentrated orange juice for July was down 1.1% at $1.47 a pound and July cotton rose 0.6% at 77.63 cents a pound.
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(END) Dow Jones Newswires
May 09, 2017 11:36 ET (15:36 GMT)