ICE sugar higher on Brazilian rains
Published: 06/08/2017, 8:31:20 AM
Raw sugar futures rose further off last week's 15-month low on Wednesday, according to Reuters.
July raw sugar settled up 0.16 cent, or 1.14%, at 14.14 cents per lb after climbing to 14.32 cents on short-covering.
Dealers said the market was monitoring weather in Brazil, where forecasts for further rains could lead to short-term disruptions to production in pockets of the cane region.
"The market might need several more days of this (slow recovery) before it dispels the impression it is still teetering on the edge of a cliff," Commonwealth Bank of Australia analyst Tobin Gorey said in a market note.
The low prices have also spurred some industry buying and fuelled expectations that Brazilian producers could start favouring ethanol over sugar.
"The ethanol parity is now at 13 cents," said Carlos Mera, senior commodities analyst at Rabobank. "And, I think, 1 cent above that, it will already start incentivising ethanol to some extent. And that's not far from where we are now. We're just on top of that."
Brazil's millers can divert cane to produce ethanol for the domestic market or sugar for export.
August white sugar settled up US$4.3, or 1.04%, at US$418.20 per tonne.