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Insight Focus
- Sugar trading was slow in the USA this week.
- Many industry growers are at the International Sweetener Symposium this week.
- Louisiana sugar cane needs rain in August.
Spot and forward trading of bulk refined sugar was slow in the week ended Aug. 4 as the trade focused on beet and cane crop development. Prices were unchanged. Many growers and others in the industry headed to the International Sweetener Symposium sponsored by the American Sugar Alliance in Napa, Calif., Aug. 4-9.
Condition ratings for the Louisiana cane crop dropped to their lowest level of the season and lowest for the date since 2018 due to lack of moisture with 72% of the state’s sugar cane area in drought as of July 25, according to the US Department of Agriculture. Trade sources said growers so far were not concerned about a negative impact on cane yields and sugar content but added rain was needed in August.
Sugar beet crops overall were in mostly good condition with Michigan the most worrisome although parts of the Red River Valley also could use some timely rain with the rating in North Dakota declining. Ratings for the Michigan crop were only 37% good-to-excellent (53% fair) as of July 30. Subsoil moisture ratings in Michigan were 73% adequate to surplus, which bodes well for the crop. Subsoil moisture levels in Minnesota, North Dakota and Montana were considerably lower than in Michigan, but beet crops in those states were rated higher than in Michigan.
Testing of beet crops’ sugar content levels was underway in most areas. Indications were the harvest in the Red River Valley will start at about an average date.
Slow deliveries of bulk refined sugar continued for most beet processors and some distributors. One processor said July shipments were the lightest in recent memory, but another noted on-time to strong deliveries to bakers, the largest sugar-using segment of the food industry. The USDA’s July Sweetener Market Data report showed October-May sugar deliveries to the baking sector down 4.4% from the same period a year earlier. Shipments to retail have been above year-ago levels, up nearly 6% through May.
Additional undelivered beet sugar supplies (along with the raw sugar tariff-rate increase in early July) have had little if any impact on spot prices. Buyers either don’t need additional sugar or sellers are holding supplies back until they have a better grasp on the size of this year’s beet crop. Spot sugar that is trading likely is a couple cents per lb below quoted levels, in part due to pressure from lower-priced high-duty imports.
Sales for 2023-24 continued at a slow pace after most business was completed in March. Prices were unchanged.
Some in the trade anticipate price weakness in the spot market due to undelivered supplies or in 2023-24 prices around October when beet processors re-enter the market to sell remaining production after they know the size of their beet crops. Most sellers, though, so far have held prices steady, with some willing to sell below list price.
Supplies of 42% high-fructose corn syrup were readily available on the spot market, but supplies of glucose and other products were tight. Prices were unchanged.
