Analyst Insights

• After two slow weeks for spec activity, the No.11 net spec long grew by 20k lots, driven by significant spec buying on the day of the report – which saw price rise by 25 points.  
• This spec buying was facilitated by commercials, who were happy to sell as price surpassed 12c. 
• In White Sugar the net spec long continued its gradual downward trend, mirroring the price as demand falls worldwide.  

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The Czapp News Feed gives you access to all the relevant news for sugar, ethanol, grains, and dairy.

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Higher ending stocks than expected in the July WASDE made Corn to plummet last Friday in Chicago erasing the gains of the week and closing almost 2% down (September future). BR and EU Corn were higher with the EU Aug future rallying 5%. Wheat had also big gains both in the US and EU as it benefited the most from the July WASDE.  

• Colombia’s locust population has grown following its particularly rainy April and May.
• Whilst locusts have caused worry across South America this year, we do not think they are a threat to Colombia’s cane fields.
• However, the Colombian sugar market is especially vulnerable to any unforeseen disruptions, so further growth in the locust population needs monitoring.

Daily Market Price Update and Commentary 10th July 2020

• As of this fortnight, CS Brazil has already crushed 40% of its cane and produced 13.3mmt of sugar in 20/21.
• At this point, a production change (i.e. sugar mix decrease) is unlikely as sugar prices still best ethanol’s.
• Hydrous ethanol sales continue to gradually recover.

Daily Market Price Update and Commentary 9th July 2020

• Nominations have slowed down a bit this week in CS;
• Around 390kmt of raws were added to Q3 line up – registered nominations for July and August;
• Waiting time to berth at Santos remains high.

• Thailand is in for another dry year following its disastrous 2019 cane crop.
• This means cane yields won’t improve by much this year.
• Rainfall is below average, and the cane is suffering as a result.

• The No.11 futures have pushed back to 12c/lb once again, meaning the raw sugar export margins remain negative.
• The No.5 futures have continued their downtrend this week, bringing Indian white sugar exports close to negative export parity.
• The USD/INR FX has strengthened this week, reducing the attractiveness of exports. 

Daily Market Price Update and Commentary 8th July 2020