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Sugar Market Flat After Hitting 4 Year Peak

Summary:
After marking a near four year high on September 29 at 24.10 cents per pound, raw sugar prices have traded mostly flat. On Thursday, Sugar #11 for March 2017 delivery on the ICE closed at 22.92 cents per pound, down 0.23 cents for the day. Continued concerns over insufficient supplies in the 2015/16 and 2016/17 marketing years have helped to boost the price of the sweetener by over 50% on a year to date basis. Large speculators have amassed huge bullish positions in sugar, worrying some traders that the market could repeat what happened in early 2010 when prices fell from 30 cents to 13 cents per pound within 6 months. According to CFTC data, managed money increased its net long position in futures from 266,624 to 268,301 positions for the week ending October 4. The next COT report will be available on Friday, October 14 at 19:30 GMT. The USDA’s Beijing office released a report on September 30 showing marketing year 2016/17 imports revised down to 6.0 million tons, 1.9 million tons below the previous forecast. The report attributes the result to higher domestic cane production, less attractive smuggling opportunities, and a Chinese clampdown against illegal sugar trade. Marketing year 2015/16 imports were also revised down by 700,000 metric tons to 6.0 million. White sugar for December 2016 delivery on the ICE closed at 2.70 per ton, down .

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After marking a near four year high on September 29 at 24.10 cents per pound, raw sugar prices have traded mostly flat.

On Thursday, Sugar #11 for March 2017 delivery on the ICE closed at 22.92 cents per pound, down 0.23 cents for the day.

Continued concerns over insufficient supplies in the 2015/16 and 2016/17 marketing years have helped to boost the price of the sweetener by over 50% on a year to date basis.

Large speculators have amassed huge bullish positions in sugar, worrying some traders that the market could repeat what happened in early 2010 when prices fell from 30 cents to 13 cents per pound within 6 months.

According to CFTC data, managed money increased its net long position in futures from 266,624 to 268,301 positions for the week ending October 4. The next COT report will be available on Friday, October 14 at 19:30 GMT.

The USDA’s Beijing office released a report on September 30 showing marketing year 2016/17 imports revised down to 6.0 million tons, 1.9 million tons below the previous forecast. The report attributes the result to higher domestic cane production, less attractive smuggling opportunities, and a Chinese clampdown against illegal sugar trade. Marketing year 2015/16 imports were also revised down by 700,000 metric tons to 6.0 million.

White sugar for December 2016 delivery on the ICE closed at $592.70 per ton, down $1.30 on the day, while white sugar for March 2017 delivery closed down by $3.10 to $593.40 per ton.

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Brent Lantzy
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