Raw Sugar Extends Gains as Rains, July Expiry Boost Market
Category: Sugar
(Wall Street Journal) – Raw-sugar futures continued to rally Tuesday morning as rains in No. 1 grower Brazil fueled concerns the harvest won’t reach its full potential.
“This is not seasonable rain,” said Michael McDougall, senior vice president at brokerage Newedge in New York. “This will further impact the potential crush number this year.”
Raw sugar for July delivery on the ICE Futures U.S. exchange, which expires Friday, was recently 1.2% higher at 17.22 cents a pound. The more-actively traded contract for October delivery was 1.6% higher at 17.41 cents a pound, down from a six-week intraday high of 17.49 cents a pound.
Traders are likely covering short positions before the contract expires Friday, market participants said.
But “the rain also harms the (cane’s sugar content) and makes it more likely the mills will stick with ethanol” production, Mr. McDougall said. That should keep prices supported, he added.
