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Insight Focus
The US sugar market is weakening as the No. 11 price weighs on domestic values due to higher reliance on high-tier imports. The USDA’s projections for next quarter show a drop in human sugar consumption but some still believe these estimates are too high.
No 11 Sugar Weighs on Domestic Prices
Forward sales of bulk refined sugar were slow during the week ended May 17 amid a backdrop of price weakness as supplies were expected to improve in 2024-25. Sugar beet planting neared completion in most key states. The spot market was quiet with deliveries running behind year-ago levels.
The general trend in the market arguably appeared to be one of weakness, led by No. 11 raw sugar futures and their outsized impact on domestic values because of the large number of high-tier imports. Strong production in Brazil kept downward pressure on prices.
Bulk refined beet sugar for the remainder of 2023-24 was offered at 55¢/lb to 57¢/lb FOB Midwest, unchanged. Refined cane sugar for 2024 was offered steady at 61¢/lb FOB Northeast and West Coast and at 58¢/lb to 59¢/lb FOB Southeast and Gulf.
Deliveries of contracted sugar varied. Some sellers continued to report slowness in certain sectors. Others saw improvement from a couple months ago, but just rising to expected levels. Sugar not being delivered was resold in the same market sector or in some cases other market sectors. At the same time, buyers were not clamouring for sugar.
WASDE Lowers Delivery Projections
The USDA in its May 10 World Agricultural Supply and Demand Estimates report lowered from April its forecast of sugar deliveries for human consumption by 100,000 short tons (90,718 tonnes), or 0.8%, based on pace to date, and carried that reduction into its 2024-25 projection. Some in the industry contend the delivery estimate still may be too high.
Source: USDA
Note: short tons converted to tonnes
Bulk refined beet sugar for 2024-25 and calendar 2025 was said to be trading mostly in the low 50¢/lb FOB area in the Midwest, with some reports in the upper 40¢/lb area depending on volume and other factors. Buyers maintained their measured contracting pace for next year. Bulk refined cane sugar for 2025 was offered at 59¢/lb FOB Northeast and West Coast and 56¢/lb to 57¢/lb FOB Southeast and Gulf.
Initial USDA projections for 2024-25 in the WASDE showed expectations for a more normalized market on the production and import side with no growth in consumption. Initial USDA 2024-25 projections for Mexico called for higher sugar production and exports but continued high imports.
Source: USDA
Sugar beets in the four largest producing states were 92% planted as of May 12, up from 80% a week earlier, 68% a year ago and 65% as the 2019-23 average for the date, the USDA said in its weekly Crop Progress report. Beets planted were 91% in Minnesota, up significantly from 60% a year ago and 56% as the five-year average.
In North Dakota, progress was 92% compared with 43% a year ago and 51% over the five-year period. Idaho was 93% complete, behind the 98% recorded last year and 95% over the five years. Finally, planting in Michigan was 95% complete, almost on par with last year’s 92% but ahead of the five-year average of 79%.
Sugar cane condition ratings in Louisiana improved slightly but were below a year ago. Moderate drought was noted in Upper Midwest beet areas and in the Florida cane growing region.
Corn sweetener markets were quiet.
