Insight Focus
Raw sugar futures have continued to trade between 19-20c/lb. Speculators continue to short the market following the May’24 raw sugar futures expiry.
New York No.11 Raw Sugar Futures
In the days following the May’24 raw sugar futures expiry, the market continued to trade between 19-20c/lb.
Speculators could be behind the sustained lower prices over the past few weeks as they have continued to build on their shorts following the expiry. Speculators are now over 200k lots short of raw sugar futures. This is the largest short they’ve held since August 2022.
Speculators are net short in the sugar market by 48k lots – the highest it has been since the market broke below 20c/lb.
Looking at the commercial participants, producers have an adequate level of hedge cover today and have not added a significant number of hedges over the past week, given the weakness in prices.
Consumers have only added 7.7k lots of long positions as they are currently well positioned in the market and have less need to buy aggressively.
The no.11 futures curve remains flat for much of 2024 and is then gently backwardated to 2027.
London No.5 Refined Sugar Futures
The No.5 refined sugar futures has traded sideways in the past week, closing at 572USD/mt on Friday.
Speculators have added 5.2k lots of hedges over the past week, bringing the net spec position back up to 19.8k lots.
The refined sugar futures curve has flattened in the past week, with the curve remaining in backwardation through to Dec’24.
No.5 Open Interest
White Premium (Arbitrage)
Over the last week, there has not been much change in the Q/N White premium as it traded sideways at 142.5USD/mt.
Many re-exports refiners need around 105-115USD/mt above the No.11 to profitably produce refined sugar. The current white premium is well above this level, which means we should theoretically see a pick-up in demand soon.
For a more detailed view of the sugar futures and market data, please refer to the appendix below.
No.11 (Raw Sugar) Appendix
No.5 (White Sugar) Appendix
White Premium Appendix
