El Nino's Sugar Shortage Drives Bullish Bets to Seven-Year Highhttp://www.bloomberg.com/news/articles/2015-12-07/el-nino-s-sugar-shortage-drives-bullish-bets-to-seven-year-high
December 07, 2015 at 10:41 AM
El Nino is making a mess of the world’s sugar production, driving up prices as investors amass the biggest bullish position in seven years.
Speculators boosted their the net-long position in raw sugar to the highest since March 2008, according to data for last week released by the U.S. Commodity Futures Trading Commission that excludes index funds. El Nino has led to excessive rain in Brazil and dryness is hurting crops in India and Thailand.
Sugar prices are up 45 percent since late August and the contract is the best-performer in the Bloomberg Commodity Index over the past six months. After five years of surplus that sent prices to the lowest since 2008, supply is expected to fall short of demand in the 2015-16 season.
“The end of the surplus cycle is probably the main reason why people are betting on further price rises,” Michaela Kuhl, an analyst at Commerzbank, said by phone from Frankfurt. “We’ll see how much of that will really materialize.”
Raw sugar for March delivery was little changed at 15.48 cents a pound on ICE Futures U.S. in New York. White sugar for the same month added 0.3 percent to $416.20 a metric ton in London.
World sugar prices tracked by the United Nations’ Food & Agriculture Organization rose 4.6 percent in November after jumping 17 percent in October. The downpours in Brazil have hampered cane harvesting and reduced the amount of sweetener in the crop.
Rainfall in Brazil’s main-producing region of center south may leave output 1 million tons lower than forecast, FCStone said last week. In Brazil’s Sao Paulo state, which accounts for about 58 percent of the country’s harvested cane, northern areas received more than twice normal rainfall in the past month, according to data from World Ag Weather.
Speculative bets on rising prices exceeded short positions by 212,384 contracts as of Friday, CFTC data show. The net-long position increased 2 percent from the previous week. It represented 18.2 percent of total market open interest, compared with 15.7 percent in March 2008, according to Green Pool.
“It’s a justifiable concern that the managed-money sector is simply reading too much into the El Nino story,” Tom McNeill, director of Green Pool Commodities, wrote in a report.
In other markets, arabica coffee for March delivery fell 0.6 percent to $1.2615 a pound in New York. Robusta for Jan. declined 0.1 percent to $1,534 a ton in London. Cocoa for March slipped 0.1 percent to $3,388 a ton in New York.
August 2, 2019
Analyst Green Pool has raised its forecast for an anticipated global sugar deficit in the 2019/20 season to 3.67 million tonnes, raw value, from a previous projection of 1.62 million.Read More
June 12, 2019
Global sugar deficit will be 1.62 mln tons in 2019/20, smaller than previously forecast, as consumption growth slows, researcher Green Pool Commodity Specialists said in a report.Read More
February 1, 2019
The world sugar market is on course for a shortfall of 1.36 million tonnes (raw value), analyst Green Pool said on Friday in its first forecast for the 2019/20 season.Read More
February 1, 2019
World sugar production will fall behind consumption in 2019-20 for the first time in three seasons, and by the most in four, Green Pool said, terming the forecast a “positive for the market”.Read More
November 29, 2018
Analyst Green Pool said on Wednesday it had raised its forecast for an anticipated global sugar surplus in the 2018/19 season to 3.60 million tonnes, raw value, from a previous projection of 3.22 million.Read More
August 30, 2018
Green Pool, highlighting India’s soaring sugar supplies, cautioned over the potential for prices of the sweetener to remain “low-ish”, even as it cut its forecast for output in many other producing countries.Read More
August 12, 2018
Changing consumer tastes raises the possibility of a long-term reduction in demand even as the world’s largest producers are notching record production. Green Pool Commodity Specialists, a consultancy, projects a 19 million-ton surplus this year, the largest ever.Read More
July 9, 2018
Surging ethanol stockpiles and tumbling prices for the biofuel risk bringing back more sugar production in top grower Brazil. “Prices have been coming down, ethanol stocks are building. Demand is strong but is probably not sufficient to clear the stocks,” said Tom McNeill, a director at Brisbane, Australia-based researcher Green Pool Commodity Specialists. “I think this assumption that everyone has made that maximum ethanol is absolutely locked in could be challenged within the next three months.”Read More
May 4, 2018
July raw sugar settled down 0.06 cent, or 0.5 percent, at 11.69 cents per lb. Focus remained on a global supply glut, with commodity analyst Green Pool forecasting a combined sugar surplus of almost 25 million tonnes for the 2017-18 and 2018-19 seasons.Read More