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Insight Focus
- US Dept of Agriculture confirms American sugar demand is soft.
- American market seen as being adequately supplied in 2022/23.
- This year’s beet crops look good; Michigan needs rain.
The US Department of Agriculture’s July 12 World Agricultural Supply and Demand Estimates (WASDE) report took center stage this week amid an otherwise quiet cash sugar market. Contracted deliveries were slow, forward sales were quiet and prices were unchanged.
The USDA in its WASDE report confirmed what sellers have been saying for several months—that domestic sugar demand is soft. The USDA lowered from June its forecast of 2022-23 deliveries for food by 75,000 tons, which was the same amount added to deliveries in May.
Other estimates in the July WASDE report were in line with expectations. For the current year, production was lowered slightly, imports were raised based on the recent raw sugar tariff-rate quota increase and strong high-tier imports. A small increase of about 26,000 tons in imports from Mexico surprised some due to that country’s poor 2022-23 cane crop.
The 2022-23 ending stocks-to-use ratio at 14.4% was indicative of adequate supplies for the market, even if prices remain historically strong.
For 2023-24, the lower delivery estimate was carried forward, beet sugar outturn was raised, and imports were raised, mainly due to the USDA’s recent refined sugar TRQ quota announcement.
Little changed in the spot sugar market. Of note was the availability of more sugar supplies as most processors and refiners continue to indicate slower-than-expected deliveries of contracted sugar.
Bulk refined beet and cane sugar prices for 2023-24 were unchanged. With most prospective sugar production sold, new sales were slow. Beet sugar sellers were reluctant to drop price offers until they are more confident in the 2023 beet crop, and buyers who still needed sugar were willing to wait amid indications of potential price weakness as the beet crop matures and demand remains soft.
Sugar beet crop ratings as of July 9 were mixed from a week earlier and from a year ago. Good-to-excellent ratings were 90% in Minnesota, 71% in North Dakota, 90% in Idaho, 50% in Michigan, 60% in Colorado, 90% in Wyoming and 80% in Oregon, USDA state offices said.
The beet crop in the key Red River Valley was doing well, while the Michigan crop needed more rain.
Montana has not released ratings this season, but a trade source indicated the crop there may be one of the best ever.
Louisiana sugar cane was rated 66% good to excellent as of July 9, down from 68% a week earlier and from 85% at the same time last year.
World sugar futures firmed, in part reflecting lower-than-expected last-half June sugar production in Brazil and dryness from El Niño in Asia. Domestic raw sugar futures were weaker after the USDA’s July 10 raw sugar tariff-rate quota increase of 125,000 tonnes.
Distributors continued to note slow deliveries of 42% high-fructose corn syrup but tight supplies of glucose.
