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Sugar Futures Rebound from 16-Month Lows

June 29, 2017 at 17:10 by Andrew Moran

Sugar futures fell to their lowest levels in 16 months on Wednesday after a report found production surged in Brazil in the first half of June. The commodity has rebounded a day later, spurred by some light buying from speculative investors.

July sugar futures rose 0.74 cents, or 5.9%, to 13.29 cents per pound at 16:55 GMT on Wednesday on the ICE Futures exchange. Sugar declined 1% during the Wednesday trading, dipping to its lowest level since February 2016. Sugar prices have had a horrendous 2017 as the commodity has tumbled 30% year-to-date.

Unica, an industry group, found that sugar production in the South American country’s main growing area has close to doubled in the first half of June compared to the same time a year earlier. According to the report, center-south mills generated 2.4 million tons of sugar, up just under 98% from June 2016.

Sugar has rebounded, primarily because of light buying performed by speculators, who are trying to build up fresh positions. Sugar futures have been unable to stay ahead of the short-term moving average amid a shedding technical structure.

In 2017, sugar has failed to materialize any solid momentum or gains. Despite Mexico and the US signing an agreement to boost the sugar industry, sugar prices have been affected by surging supplies in India and Brazil – earlier reports had suggested Brazilian production would be weaker than expected.

Overall, analysts believe that the world could be left with a substantial surplus by the end of the year.

In other commodities, the market has been seesawing back and forth. July coffee futures jumped $0.01, or 0.86%, to $1.238 per pound. July wheat futures soared $0.235, or 5.19%, to $4.81 per bushel. July orange juice futures tumbled $0.063, or 4.56%, to $1.32 per pound.

If you have any questions and comments on the commodities today, use the form below to reply.

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