Wt Sugar Discussion Threads

[stublue] 09/10/2015 13:52

Sugar is backwardating...which is nice!

[bobdouthwaite] 07/10/2015 17:04

Sugar Market at Start of Deficit Cycle
hxxp://www.agrimoney.com/news/sugar-market-at-start-of-deficit-cycle-says-green-pool--8856.html

[stublue] 06/10/2015 17:10

yes, it appears it's off to 1400 soon enough.
The trend has changed, so by sitting tight, the rewards will be higher longer term.

Morgans are calling it (so maybe the trend change isn't so certain after all. Lol)

==============================================================
Sugar prices have bottomed, says Morgan Stanley

Sugar prices have finally found their bottom, as the market uncouples from the ever-weakening Brazilian real, Morgan Stanley said.

"We think sugar prices are unlikely to revisit their seven-year lows from August," said the bank, forecasting that demand will outstrip supplies in 2015-16, which began at the start of this month.


Raw sugar futures rallied in New York last week, as the front-month contract reached four-month highs.


Last week speculators increased their positive bets on the price of sugar to the highest level in 14 months, indicating a shift in investor sentiment.


Unsustainable pricing


Brazil is the world's biggest sugar exporter, and weakness in the currency has weighed on raw sugar markets.

A lower real means the sellers will accept lower dollar-denominated prices for their sugar, as their dollar cost of production falls.

But Morgan Stanley points out that sugar prices have fallen further than the real.

"Prices at the August lows near 10 cents were unsustainable for global production in the long run, a fact that seems unlikely to change with further real depreciation," Morgan Stanley said.

Fuel policy

Pegging expectations of this season's deficit, the extent to which supply outstrips demand, at 3.7m tonnes, Morgan Stanley noted the effects of fuel policy in Brazil.

Sugar recently got a boost from the news that Petrobras, Brazil's state owned energy company, would be lifting gasoline prices.

This encourages consumers to favour ethanol fuel, which encourages mills to divert cane to ethanol production, reducing sugar production.

"To meet the demand, mills have been diverting more of the cane crush toward ethanol and away from sugar production, lowering the year-to-date sugar mix to the least since 2008, in line with our forecasts,"

And there are also expectations that an additional tax levy, on top of higher Petrobras prices, could increase ethanol demand.

The tax has is being mooted as Brazil struggles to contain its government overspending.

Indian dryness

And Morgan Stanley downplayed the effects of potential changes to Indian export policy, which could mandate mills to export 4.0m tonnes of sugar, weigh on global prices.

"With Indian sugar exports uneconomic, the Indian government's announcement last week that exports would not be subsidized in 2015-16 lifts much of the overhang on sugar market sentiment related to the uncertainty around the mandate," the bank said.

Morgan Stanley noted that Indian supply was being squeezed by dry weather, irrespective of the export policy.

"The trajectory of India's production is more important to the global supply and demand picture than India's export policy."

Morgan Stanley's comments come as Rabobank notes a "growing consensus" that sugar production will fall short of demand in the 2015-16 sugar season.

Rabobank maintains its own forecast for the sugar deficit demand, of 4.8m tonnes.

"Looking purely at the fundamentals, it seems like the worst of the current down cycle could be past," Rabobank said.

El Nino boost

This year's El Nino effect has added risk upside to sugar prices.

The effect is associated with heavy rains in the Americas, and dryness in the western Pacific.

Rains can disrupt harvest progress, as well lower the sugar content in cane, while dry weather threatens the growth of next season's cane.

"There is clearly scope for further weather worries to impact production and price expectations in the coming months," Rabobank said.

[mcbeanburger] 02/10/2015 14:58

good call stublue. short covering must help have helped this along.

heading for 1400?

we'll see.

[stublue] 01/10/2015 16:50

Sugar market roaring away in March 2016 contract. Rough Rice still responding to El Nino too.

======================================

Indian suffers first two-year drought in 3 decades

17:21 UK, 30th Sept 2015, by Agrimoney.com


India is experiencing the first back-to-back drought in three decades, after El Nino disrupted the progress of the monsoon, while raw sugar futures surged to a 2-month high.

Data from the Indian Meteorological Department shows that the rains over the June-September monsoon period were just 86% of their normal level.

The department had previously forecast the monsoon at 88% of its normal strength.

A shortfall of monsoon rains by more than 10% is classified as a
severe drought.
Driest since 2009

The monsoon, the seasonal rains which hit India in the mid-summer, is essential to Indian agriculture, normally providing around 80% of the country's total rainfall.

This is the driest monsoon since 2009, and the first time two sub-90% monsoons have come in succession for three decades.

As well as providing soil moisture for summer-sown crops, the monsoon rains feed most of the country's rivers, and are necessary for irrigation, which is particularly key to winter-sown

As of last week, water levels at India's 91 main reservoirs were down to 60% of capacity, from 75% as of last year, and below the 77% 10-year average.

Quick withdrawal

And the withdrawal of the monsoon, which sees rain pushed back down from the north by an influx of dry air, has begun ahead of schedule.

"The overall monsoon is averaging 14 percent below the normal rainfall across India and a faster-than-normal withdrawal from northern and central India will keep further the deficit in place in the coming weeks," said meteorologist Eric Leister.

The weakness in the monsoon is tied to the ongoing El Nino effect, which causes dry weather in the western Pacific.

Sugar cane hit

The overall weakness of the monsoon, and particularly its early withdrawal, will raise further concerns about Indian sugar production.

The state of Maharashtra, which is India's key cane growing region has suffered particularly low levels of rain, although there has been heavy precipitation in recent days.


And rains are forecast to make an early retreat, with the monsoon already withdrawing from the northern part of the state.

Monsoon rains usually linger through October in the region.

Limited plantings

India's total sugar production is likely to be about 27m tonnes during the 2015-16 sugar season, according to sugar producers' association, ISMA.

Lower rainfall in July and August is said to have hit yield prospects.

Sugar production in Maharashtra for 2015-16 was seen down 14% from last year.

And this week Rabobank noted that "plantings are expected to be limited for the 2016-17 season".

Dry weather discourages farmers from investing in new planting.

Price surge

The weather worries in India are bullish for the sugar price.

Thomas Kujawa, of Sucden Financial, said "there seems to be a little more chat than normal on next year's sugar production in India".

Sugar prices rose today. The October raw sugar contract surged 4.2% in New York, on its last day of trading, at 12.25 cents a pound in midday deals.

And the March 2016 contract, the most widely traded, was up 3.5% to 12.89 cents a pound.

[bobdouthwaite] 26/9/2015 10:18

o/t but the price of LHOG has broken the 50 day ema for the first time in over a year. Possibly a response to Chinese demand.... hxxp://www.globalmeatnews.com/Industry-Markets/China-s-demand-for-pork-imports-set-to-take-off

[stublue] 25/9/2015 21:02

Big 5% rise in sugar - biggest daily rise in a year. I think it's more down to the recovering Brazilian real today, with a bit of heavy rain in Brazil stopping harvest being brought in.

[stublue] 23/9/2015 20:12

El Nino - another play on this is Rough Rice. It's been motoring for several months now.
hxxp://insidefutures.com/charts/index.php?sym=ZRX15&a=D&studies=RSI;MACD

[ben nevis] 15/9/2015 12:56

Got out of sugar longs a few months ago, when it dropped even further !!!

Overall I was roughly evens on it.

[stublue] 06/9/2015 23:19

mmm...lot of sceptism about sugar and a big net short from hedge funds, so conditions are maybe rife for a nice rise. Will be an interesting week.

[hectorp] 06/9/2015 15:58

I sense the El Nino will certainly affect sugar production. But there are so many variables as the above poster suggests.

Over to the copper thread..

[bobdouthwaite] 05/9/2015 10:29

It looks even more complicated to me...

hxxp://www.agrimoney.com/news/oversold-sugar-futures-try-again-to-retake-11-cents-a-pound--8727.html

[kaos3] 05/9/2015 09:26

thanks. same thinking but artificial sweeteners are cheap. also conservation function of sugar is not there any more.etc. watching sugar for years but still not a confirmed go. 50,100 crossing 200 mda

[stublue] 04/9/2015 21:31

Sugar No11 - has fundamentals in place to rise:

oil is showing a double bottom on the monthly chart and is bullish. So making ethanol more viable.

El Nino weather event is the strongest since 1997 - and during these episodes, India gets not enough Monsoon, and Brazil too much rain (thus the 2 biggest exporters adversely affected).

Sugar recently went to 10.18c/lb. That's 85% off it's all time high of 66c in 1974. But...factoring in inflation since 1974, that's 97.8% off it's all time high. That makes sugar quite cheap!

And..chart looking a bit more lively recently.

[ben nevis] 02/1/2015 14:28

Incredibly cheap today.

Bought more NY sugar (MAR) at 1440.

[ben nevis] 11/11/2014 16:42

Fantastic rally on Sugar today!!!

Why no-one buying these days ??

Been at bargain prices for weeks.

[ben nevis] 11/11/2014 16:21

Added more longs while it was depressed.

Now a Fantastic Rise today!! all closed now in profit. :)

[ben nevis] 04/11/2014 18:38

Added more long at 1571

Time to BUY.

[ben nevis] 04/11/2014 10:00

Sugar very cheap now!!! Time to BUY ??

I've gone long with MAR NY sugar at 1589.

Maybe spob can do some updating for this thread ??

[stublue] 15/9/2013 20:27

>>McBeanburger
I'm thinking it will be a slow rise on the weekly chart - eventually seeing around 20c/lb by Xmas.
If you see the weekly chart, it's clear the downtrend is over but perhaps initially the rise will be slow.

[mcbeanburger] 16/8/2013 21:01

hey stublue - I only have ice(ing) sugar oct. what are looking for in the chart?

[stublue] 16/8/2013 20:55

It made 15.8c/lb. Now done an about turn and heading upward.
Very long.

[stublue] 20/2/2013 22:48

Its looking at 15c/Ib. But if it goes anywhere near that, I'm very long.

[praipus] 13/2/2013 14:21

SUGA or the FX?