Sugar futures fall, as Brazilian harvest makes a record start

(Agrimoney) – Sugar futures fell, as the Brazilian cane body Unica announced a record start to the cane cutting season across the Centre South cane belt, thanks to some “extremely dry weather”.

Unica issued its first forecast for the 2016-17 sugar season, which is officially started this week.

Sugar output is expected to boom, thanks to higher cane availability than last year, as well as higher sugar yields, and mills increasingly favouring sugar over ethanol production.

Record start

The data showed a storming  start to the season, with sugar production over the first half of the April up 261% year on year, at 1.43m tonnes, as mills rush to make up for a very slow end to the previous season, caused by heavy rains.

A survey of analysts prior to the release pegged expectations for sugar production over the period at 1.1m tonnes.

The cane crush over the first half of April came in at 32.84m tonnes, where analysts were looking for a crush of 29.4 m tonnes.

Dry weather

Unica ascribed the rate of cane crushing to the “extremely dry weather observed in the first half of the month”.

By the end of the reported period, 205 mills were up and running for the season, compared with only 165 during the first half of the year.

The dry weather is also increasing the proportion of sugar available in the cane, Unica said.

Bumper season

Unica announced its first forecasts for this season.

The cane body forecast Centre South sugar production over 2016-17 at 33.5-35.0m tonnes.

This is up from 2015-16 production of 31.2m tonnes, and compares with a forecast by the Brazilian crop supply agency Conab, of 34.2m tonnes this season.

Still, the figure came in below a forecast made by Platts this week, at 35.12m tonnes,

Heavy cane volumes

Unica forecast the total volume of cane crushed in the Centre South this season to be 605-630m tonnes.

This compares with a forecast by Platts of 620m tonnes, and comes in lower than the 637.68m tonnes forecast by Conab.

The total proportion of sugar in the cane crop was forecast at 134-136 kilogrammes per tonne of cane.

This is up from 130.5 kilogrammes in 2015-16, after heavy rain throughout the crushing season reduced the quality of the crop.

Platts forecast the proportion of sugar at 134.50 kilogrammes per tonne.

July sugar futures were down 1.7%, at 15.78 cents a pound in early afternoon deals in New York.