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SUGAR REPORT | 26.10.2020 | MARKET COMMENTARY | SEBAT GROUP

SUGAR REPORT | 26.10.2020 | MARKET COMMENTARY

Mar NY world sugar #11 (SBH21) on Friday closed down -0.06 (-0.41%). Dec London white sugar #5 (SWZ20) closed down -3.40 (-0.85%).

Sugar prices on Friday moved lower after weakness in the Brazilian real prompted some long liquidation in sugar. The Brazilian real fell -0.47% Friday to a 4-session low against the dollar, which encouraged export selling by Brazil's sugar producers.

On Thursday, NY sugar posted a new 7-3/4 month nearest-futures high, and London sugar on Tuesday posted a 7-3/4 month high. Sugar prices have trended higher over the past five weeks on concern that Brazil's dry conditions may curb sugarcane yields and reduce Brazil's sugar production. Irregular rain in Brazil's sugar-growing areas is keeping soil moisture levels below normal. On Monday, data from Somar Meteorologia showed that rain in southern Brazil was only 9.8 mm in the past week or 33% of the historical average. Maxar recently said that Brazil's sugar-growing regions have only received 5%-25% of average rain in the past few months, leaving crops "extremely dry." Also, a La Nina weather pattern could lead to prolonged excessive dryness in Brazil that cuts sugarcane yields.

Another bullish factor for sugar was Thursday's prediction from researcher Datagro that Brazil Center-South 2021/22 sugar production will fall -5.3% y/y to 36 MMT due to excessive dryness.



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