Apr 23, 2024 (MENAFN via COMTEX) --
(MENAFN - The Rio Times) In the bustling world of commodity trading, sugar prices in New York have shown signs of recovery after dropping to their lowest levels in over a year.
This Monday, sugar futures rose by up to 2.2%, influenced by a wave of short-covering and emerging signs of a tightening supply.
However, these gains were somewhat pared down as ongoing dry conditions in Brazil began to impact production forecasts negatively.
Just last week, Brazil 's national supply company, Conab, revised its production estimates for the 2023-2024 season downward.
Dry weather, expected to persist for the next six to ten days, will further stress crops, as forecasted by Maxar Technologies.
This troubling weather pattern follows a report from the Hightower Report.
It noted that while the 2024-2025 season started strong, the recent dry spells are likely to reduce sugarcane yields significantly.
In Thailand, last season's sugarcane output dropped over 12% year-over-year due to drought and rising costs, as reported by the government.
These global production challenges are stirring bullish sentiment in the sugar markets, which had faced a brutal start to April.
Fluctuations in the Brazilian real further influence price dynamics, prompting traders to closely monitor the currency.
A downward trend could further pressure sugar prices, as noted by analysts from the Hightower Report.
Volatility in Sugar Futures
Amidst this volatility, sugar futures have shed about 3 cents, or 13%, this month alone.
The drop was influenced by the weakening Brazilian real, which typically encourages exports, and optimism about an increase in Indian production following predictions of a robust season.
The steep price drop pushed the most active sugar contract into oversold territory last week.
This marked its first venture there since December, indicating that the market might be ripe for a rebound.
Market supported by commercial short-coverings, noted by Michael McDougall from Paragon Global Markets, with speculators capitalizing on price fall.
Commodity Futures Trading Commission data shows money managers adopting a net bearish stance for the first time since 2022.
As of mid-morning in New York, raw sugar futures were trading up at 19.66 cents per pound, reflecting a 0.8% increase, while white sugar in London climbed 1.5%.
This uptick is a testament to the complex interplay of global agricultural conditions, currency fluctuations, and market speculations.
These factors collectively drive the day-to-day narratives in the world of commodities.
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COMTEX_451295370/2604/2024-04-23T14:25:26
