ICE white sugar slides to fresh low on expectation of large EU crop
Published: 08/10/2017, 4:36:19 PM
White sugar futures on ICE fell on Thursday to their lowest level since February last year, weighed down by bearish chart signals and the prospect of a large EU crop, according to Reuters.
October white sugar was down US$2.70, or 0.71%, at US$375.20 a tonne by 1342 GMT, after hitting US$375.00 earlier, the lowest for the front month since February 2016.
Dealers said the market focus was on the European Union. Low open interest in the December and March contracts is fuelling worries that farmers still have to hedge the bulk of the bloc's first post-quota crop, which could be up to 20% larger than last year.
"We think the market is yet to see the weight of the European farmer selling," said one dealer. "They haven't really got going yet."
October raw sugar was down 0.11 cent, or 0.81%, at 13.53 cents per lb, the weakest for the front month since July 12.
Dealers put the dip partly down to technical weakness and expectations for more producer selling from top grower Brazil, where growers are also believed to be under-hedged.
"The selling pressure is therefore present and will get more urgent as we approach expiry at the end of September," Nick Penney, senior trader at Sucden Financial, said in a note.
The bearish mood was also reinforced by expectations of strong production in Centre-South Brazil, with the focus on upcoming cane crush data from industry group UNICA.
=Cosan SA Industria e Comercio said on Thursday that ethanol sales were giving better returns than sugar in some Brazilian states, a factor that could change its current production mix.