Sugar futures rallied Monday, snapping a nine-day losing streak, as Brazilian rainfalls are expected to finally cause some harvest interruptions.
Raw sugar for October delivery was up 2.3% to settle at 13.50 cents a pound on the ICE Futures U.S. exchange, marking its first day of gains after losing for nine consecutive sessions due to the prospects of record sugar production in Brazil.
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In Brazil, the world's largest sugar exporter, the weather forecast says that rainfall this week will be frequent and abundant from southern Sao Paulo to Rio Grande do Sul and northwest into Mato Grosso do Sul and portions of both Bolivia and Paraguay, which will affect the sugarcane crops, according to Michael McDougall, director of commodities agency at Societe Generale SA.
Dry and favorable weather has been a benefit to the pace of sugarcane harvesting in recent months. Brazil's sugarcane industry group confirmed Friday that sugar production in the second half of July was at an all-time record for any two-week period at 3.413 million tons. The cane crush was posted at 50.737 million tons, also a record.
This was despite the fact that there appeared to be nine fewer mills in operation than last year, some 265, Mr. McDougall said. Brazilian mills don't have the storage capacity to hold the crop, and they need to sell the sugar to pay for cane crushing, he said.
In Australia, dryness is expected to prevail through the next 10 days in Queensland and northern New South Wales. The region is already too dry and crops are being stressed by the lack of moisture and some rising temperatures. Production will be more seriously cut if there is no significant rain soon.
Cocoa for September fell 2.9% to close at $1,920 a ton, arabica coffee for September was down 2.4% to settle at $1.3695 a pound, cotton for December fell 0.7% to close at 67.75 cents a pound, and frozen concentrated orange juice for September lost 0.04% to close at $1.3605 a pound.
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(END) Dow Jones Newswires
August 14, 2017 15:07 ET (19:07 GMT)