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ICE Raw Sugar Settles Higher on Firm Crude, Strong Brazilian Real

30 Jun 2020 8:25 am
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Mumbai (Commodities Control) - Sugar prices on Monday settled higher on a rally in crude prices and strength in the Brazilian real.

Crude prices rose more than 3% on Monday, which boosts ethanol prices and may prompt Brazil's sugar mills to divert more cane crushing toward ethanol production rather than sugar production, thus reducing sugar supplies. Strength in the Brazilian real on Monday sparked some short-covering in sugar futures. The real on Monday climbed 0.97% against the dollar.

July raw sugar, which expires on Tuesday, closed up 0.16 cents to 11.71 cents per lb. August white sugar ​​rose $1 to $352.20 a tonne.

Market participants do not expect a large delivery against the July expiration, citing a fall in the white premium and smaller open interest.

"In the next few weeks the sugar price has to connect with the ethanol price and push (Brazilian) mills to make more ethanol/less sugar. As it stands, it does not look as if that is going to happen," said Marex Spectron in a note.

Sugar prices also saw support Monday from crop concerns in India after a fresh swarm of locusts on Sunday moved into Uttar Pradesh, India's biggest sugarcane growing region.

Support and Resistance for Sugar #11 (October) lies at 11.22 cents and 12.12 cents per lb, respectively.



(Commodities Control Bureau)


       
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