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Insight Focus
The US sugar market is in a holding period as buyers remain reluctant to add cover while sellers refuse to lower prices. Crop conditions and weather patterns improved this week, providing confidence to buyers that there should be no huge price surge.
Market Lull Continues
The cash sugar market was quiet during the week ended June 21 amid slow spot and forward sales and steady prices. Sugar beet crop condition ratings mostly were high, and the drought situation in Florida was erased after recent heavy rainfall.
Bulk refined beet sugar for 2024-25 could be bought below 50¢/lb FOB Midwest, and refined cane sugar was offered below 60¢/lb FOB Northeast and West Coast and slightly above the mid-50¢/lb area in the Gulf and Southeast. Spot refined sugar values were modestly above forward prices and unchanged.
One beet processor remained out of the 2024-25 market, except for private label sugar, at least through September. Other processors continued to sell at a slow but steady pace for next year.
Buyers and Sellers Face Off
Buyers were in no rush to contract for 2025. Some buyers were hoping for still lower prices as the season unfolds, with beet crops developing well and forecasts of larger supplies from Mexico. At the same time, beet processors saw no reason to lower prices this early in the season amid summer weather uncertainty and ideas Mexico’s crop may not rebound as much as the USDA forecasts. Buyers’ hopes that beet sugar prices may be lowered because of slow sales were offset by sellers noting that sales were at a more normal pace compared to the rush in the past couple years.
There appears to be limited downside to prices but also limited upside for 2024-25, so price-wise users appear to be comfortable with their slow buying status. But it may be wise for users to put on some coverage if they haven’t already or to add to existing coverage amid weather uncertainty.
Crop Conditions Improve
Sugar beet crop condition ratings as of June 16 were mixed compared with a week earlier and a year ago. Crop prospects appeared to range from average to excellent. Some acres were lost to recent hailstorms in the Rocky Mountain states. Excessive moisture was an issue in the Red River Valley but was correcting. The Michigan crop was seen as one of the best ever at this point in the year.
Overall, trade sources thought the beet crop was good but not great, and with fewer planted acres, 2024-25 beet sugar production was likely to come in slightly above 5 million tons (4.5 million tonnes) and near the USDA forecast.
The sugar cane crop situation improved with Florida’s cane crop going from 100% in moderate-to-severe drought as of June 11 to no cane in drought areas as of June 18 after recent heavy rainfall in southern Florida. Louisiana cane areas also were drought free.
Deliveries for 2024 remained strong. Beet processors said some users were pulling contracted supplies ahead of schedule, while others noted active, on-schedule shipments. Beet processors have been selling spot sugar in small volumes, although buyers are not clamouring for more supplies.
The USDA in May lowered its forecast of sugar deliveries for food in 2023-24, maintained that forecast in June and carried it forward into 2024-25. At the same time, April sugar deliveries for human use were up 2.4% from April 2023, although deliveries for the October-April period still were down 3% from the same period last year.
Source: USDA
The corn sweetener market was quiet.
