Sugar prices ended lower for the seventh straight session Monday, unable to sustain earlier gains as trader perception of the market’s fundamental supply and demand picture is beginning to shift.
Raw sugar for March dropped 2.4% to end at 12.83 cents a pound on the ICE Futures U.S. exchange, the lowest close since Sept. 29.
“Over the last month, there has been a large change of perceptions,” Michael McDougall, head of the Brazil desk at Societe Generale said in a note. “…This is not just a fund liquidation move but a change in the trade take on how the future supply/demand of the market will be.”
Further fueling those notions, Platts’ Kingsman published a note before Monday’s open reducing their estimates for how much global demand for sweetener would outstrip production in the current season that ends in September to $4.86 million metric tons from 5.26 million metric tons on higher production estimates out of Brazil, the world’s largest producer of sugar from cane. The firm also increased their production estimates for the marketing year that begins in October saying that rains that extended this year’s crushing season are helping the development of new cane.
In other markets, cocoa for March delivery rose 3.9% to end at $2,868 a ton, arabica coffee futures for March closed up 1.2% at $1.1775 a pound, March cotton rose 1.1% to end at 61.79 cents a pound and frozen concentrated orange juice futures jumped 1.4% to close at $1.342 a pound.