October NY world sugar #11 (SBV25) on Monday closed down -0.21 (-1.36%), and December London ICE white sugar #5 (SWZ25) closed down -4.70 (-1.03%). Sugar prices sold off on Monday, with London sugar posting a new 4-year low.   Sugar prices have been sliding over the past six months, with NY sugar slumping to a 4.25-year nearest-futures low last Thursday on ramped-up sugar production in Brazil.  Last Wednesday, Unica reported that Brazil's Center-South sugar output in the second half of August rose by +18% ...

Core Insights - Sugar prices have declined sharply due to increased production in Brazil, with October NY world sugar closing down 2.26% and December London ICE white sugar down 1.44% [1][2] Production and Supply - Brazil's Center-South sugar output in the second half of August rose by 18% year-on-year to 3.872 million tons, with the percentage of sugarcane crushed for sugar increasing to 54.20% from 48.78% the previous year [2] - Cumulative sugar output for the 2025-26 season through August fell by 1.9% year-on-year to 26.758 million tons [2] - Brazil's sugar mills are prioritizing sugar production over ethanol, leading to increased cane crushing for sugar as harvesting peaks [5] Export Dynamics - India may divert 4 million tons of sugar to ethanol production in the 2025/26 season, which could lead to an increase in sugar exports, with expectations of up to 4 million tons, surpassing earlier estimates of 2 million tons [3][6] - The Indian Sugar and Bio-energy Manufacturers Association has requested permission to export 2 million tons of sugar for the 2025/26 season [6] Market Sentiment - An excessive short position by funds in NY sugar futures could lead to potential gains in a short-covering rally, with net-short positions increasing by 32,849 to 182,608, the highest in nearly six years [4] - The International Sugar Organization forecasts a global sugar deficit of 231,000 tons for the 2025/26 season, marking the sixth consecutive year of deficits, although this is an improvement from a 4.88 million ton shortfall in 2024/25 [7]

Core Insights - Sugar prices are experiencing downward pressure due to increased production forecasts and export requests from India [1][2][4] Group 1: Sugar Production and Supply - The Indian Sugar and Bio-energy Manufacturers Association has requested permission to export 2 million metric tons (MMT) of sugar for the 2025/26 season, which may impact global supply dynamics [1] - Brazil's sugar production is projected to rise, with a reported 16% year-on-year increase in sugar output in the first half of August, reaching 3,615 thousand metric tons (MT) [2] - Brazil's sugar mills are prioritizing sugar production over ethanol, leading to an increase in sugarcane crushed for sugar [3] Group 2: Global Sugar Market Outlook - The International Sugar Organization (ISO) forecasts a global sugar deficit of 231,000 MT for the 2025/26 season, marking the sixth consecutive year of deficits, although this is an improvement from a 4.88 MMT shortfall in 2024/25 [4] - Brazil's government crop forecasting agency, Conab, has reduced its sugar production estimate for Brazil in 2025/26 by 3.1% to 44.5 MMT, citing adverse weather conditions [5] - Expectations for abundant sugar supplies are leading to lower sugar prices, with projections of a 7.5 MMT global sugar surplus for the 2025/26 season, the largest in eight years [6]

Core Insights - Sugar prices have recently increased due to a rise in WTI crude oil prices, which may lead to a shift in sugar production towards ethanol, potentially reducing sugar supplies [1] Group 1: Sugar Production and Supply - Brazil's sugar production in the first half of August increased by 16% year-on-year to 3,615 million tons, with the percentage of sugarcane crushed for sugar rising to 55% from 49.15% the previous year [2] - Brazil's government crop forecasting agency, Conab, reduced its 2025/26 sugar production estimate by 3.1% to 44.5 million tons, citing lower sugarcane yields due to drought and excessive heat [5] - Covrig Analytics reported that Brazilian sugar mills are currently prioritizing sugar production over ethanol, leading to increased cane crushing for sugar [3] Group 2: Global Sugar Market Outlook - The International Sugar Organization (ISO) forecasts a global sugar deficit of 231,000 tons for the 2025/26 season, marking the sixth consecutive year of deficits, although this is an improvement from a 4.88 million ton shortfall in 2024/25 [4] - The USDA projected a record global sugar production of 189.318 million tons for the 2025/26 season, with ending stocks expected to rise by 7.5% year-on-year to 41.188 million tons [6] - Expectations for abundant sugar supplies are currently undermining sugar prices, with a projected global sugar surplus of 7.5 million tons for the 2025/26 season, the largest in eight years [6]

Core Insights - Sugar prices have recently increased due to a rally in WTI crude oil, which has led to short covering in sugar futures, benefiting ethanol prices and potentially reducing sugar supplies as mills may shift focus to ethanol production [1] Group 1: Sugar Production and Supply - Brazil's sugar production in the first half of August rose by 16% year-on-year to 3,615 million tons, with the percentage of sugarcane crushed for sugar increasing to 55% from 49.15% the previous year [2] - Covrig Analytics reported that Brazilian sugar mills are currently prioritizing sugar production over ethanol, driven by drier cane crops [3] - Conab has reduced its Brazil 2025/26 sugar production estimate by 3.1% to 44.5 million tons, citing lower sugarcane yields due to drought and excessive heat [5] Group 2: Global Sugar Market Outlook - The International Sugar Organization (ISO) forecasts a global sugar deficit of 231,000 tons for the 2025/26 season, marking the sixth consecutive year of deficits, with global production expected to rise by 3.3% year-on-year to 180.6 million tons [4] - The USDA projected a record global sugar production of 189.318 million tons for the 2025/26 season, with ending stocks expected to increase by 7.5% year-on-year to 41.188 million tons [6] - Expectations for abundant sugar supplies are currently undermining sugar prices, with a projected global sugar surplus of 7.5 million tons for the 2025/26 season, the largest in eight years [6]