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Insight Focus
- Sugar cane prices remained stable, with some offers edging slightly higher to between 59 cents/lb and 61 cents/fob FOB Gulf and Southeast.
- Several thousand acres of sugar beets in the Minnesota-North Dakota region will not be harvested as tonnage would exceed processing capacity for the year.
- The huge Red River Crop is creating a lack of urgency as farmers fear lower beet prices.
Refined Cane Pricing Remains Strong
Refined cane sugar prices for 2024 remained steady, even climbing slightly higher during the week ended October 27, while beet sugar prices were unchanged. The sugar beet harvest made rapid progress in most states, while the cane harvest progressed slowly in Louisiana.
One cane refiner offered sugar for calendar year 2024 at 63 cents/lb FOB Northeast and West Coast, up 1 cent/lb from a week earlier. Most offers were between 59 cents/lb and 61 cents/fob FOB Gulf and Southeast, up to 1 cent/lb higher. Spot cane sugar was unchanged at 68 cent/lb nationwide through December 31. Spot and forward beet sugar prices also were unchanged.
The sugarcane harvest in Louisiana continued at a slow pace. The state’s US Department of Agriculture field office said the harvest was 19% completed as of October 22, behind last year’s pace of 23% and the five-year average of 24%. The slower progress was primarily due to a delay in the harvest designed to allow the crop a chance to receive additional amounts of reviving rainfall. Crop ratings moved higher in the latest week.
Beet Price Could be Weighed by High MN, ND Volumes
Sugar beets in the four largest producing states were an aggregate 72% harvested as of October 22, behind 78% at the same time last year but ahead of 67% as the 2018-22 average pace for the date, the USDA said in its Crop Progress report.
Harvest in the Red River Valley neared completion, and indications were that sugar beet production in the region may reach a record high this year. Trade reports indicated several thousand acres of sugar beets in the Minnesota-North Dakota region will not be harvested as tonnage would exceed processing capacity for the year. The prolific crop may pressure beet sugar prices to offer an even larger discount to refined cane sugar values.
One trade source said he was surprised by the historic turnout in the Red River Valley after poor weather conditions during the front end of the crop’s development. But ideal conditions during the back half of the growing season appeared to more than make up for the rough start.
Bumper Crop Prompts Lack of Urgency
Michigan’s harvest at 22% lagged last year and the average pace significantly as growers delayed harvest to give beets more time to develop.
Some sellers still were not in the market for calendar 2024, feeling there was no urgency as processors took their time assessing sugar production from this year’s crop.
Another factor keeping sellers sidelined was the thought that larger beet sugar supplies may pull prices lower. Farmers may have been counting on higher prices amid a burgeoning global sugar deficit and the drastically reduced cane crop in Louisiana. The situation may be encouraging some processors to stay on the sidelines in an attempt to secure better prices for their growers.
Sellers indicated deliveries of contracted sugar in October were picking up after lagging for much of the summer. One trade source said indications for November deliveries looked strong and should meet expectations.
Annual contracting of corn sweeteners for 2024 was progressing slowly as buyers resisted corn refiners’ steady to firmer price offers amid lower corn prices and ample corn supplies.
