Sugar to buck strong seasonal time of weakness?
Sugar prices have continued to rally recently with the no.11 July contract rallying by almost 3.9% on Tuesday of this week. The latest UNICA data has shown that sugar cane crushing in CS Brazil dropped 31% over the first half of April. Sugar production has fallen 36% year on year. On top of this, the sucrose content of the cane sugar was worse than expected falling 3.6% year on year. CS Brazil is still expected to see a drop in sugar output this season.
This has meant that the normally weak time of May for sugar is being called into question. Over the last 10 years, sugar has fallen 9 times between 30 April and May 07. The largest fall was in 2017 with a -4.95% drop. This strong seasonal trend may be reversed this year, so certainly one market to keep focused on.
Trade Risks: Any sharp pick up in sugar production numbers can weigh on prices.