Core Viewpoint - The New York raw sugar futures prices have fallen to their lowest level in five years due to rising expectations of global supply surplus, with a significant drop of 14% so far this month, potentially marking the largest monthly decline since December 2023 [1] Group 1: Market Trends - The most active raw sugar futures contract dropped by 2.43%, closing at 14.07 cents per pound [1] - Analysts from StoneX Group Inc. indicate that the significant drop in October highlights "structural major pressure" on futures prices, driven by an anticipated surplus of 2.8 million tons in the 2025/26 season [1] - Following Brazil's "Sugar Week," market estimates for the 2025/26 sugar supply surplus have been raised from an initial consensus of 2 million tons to 2.77 million tons, with potential for further upward adjustments [4] Group 2: Supply Factors - Wall Street analysts expect Brazil, a leading sugar producer, to maintain high sugar production levels in 2025/26, with multiple investment institutions raising their production and export forecasts for Brazil [4] - The core drivers of the anticipated surplus include increased production in Brazil, rising corn ethanol output, and India's potential recovery in sugar exports, which may exceed StoneX's current estimate of 1.5 million tons [4] Group 3: Demand Dynamics - The rapid rise in the penetration of GLP-1 weight loss drugs in the U.S. is impacting sugar consumption, with surveys indicating a reduction in spending on sugary products by approximately 6% to 10%, thereby lowering marginal demand growth expectations [5] - The volatility of the USD/BRL exchange rate has also affected Brazil's export rhythm, with a weaker BRL favoring exports and further pressuring prices [5] Group 4: Market Sentiment - Ongoing U.S. government shutdown is contributing to traders' pessimism regarding the commodity market, as the CFTC has been unable to release data on large institutional investors and speculators since September 23 [5] - Recent price movements show a decline in New York raw sugar futures by 1.32%, with prices reported at 14.23 cents per pound, while London white sugar prices fell by 1.08% [5]