(posted first on commoditywx)
=======================================
The reports that Weather Trends has been issuing regarding the global sugar supply situation has, for several months, been calling for a gradual improvement to the global balance sheet; however, we have always been less optimistic than most consensus estimates regarding the shift to surplus status. Most agencies had been figuring a number of +1.3 to +1.5 mmt for the 2010/11 (Oct/Sep) year, which is down from earlier projections in the +2.5 to +3.0 mmt range. The International Sugar Organization (ISO) recently issued a revision to their outlook, placing their expectation for the 2010/11 crop at +196,000 mt, which is down significantly from their 1.3 mmt number from last November. Given the margin of potential error on these forecasts, 2010/11 could easily remain in deficit for the current marketing year. Further, there is still the potential for poor weather over the next couple of months to negatively impact cane devoted to the next (2011/12) season, so at this stage, we are viewing a potential break-even point in the sugar market to take place in the 2011/12 crop year. Recent revisions among the majority of estimates should also serve as verification of the methods that we have developed regarding crop potential at Weather Trends.
Looking ahead, we are expecting a favorable pattern to develop over Brazil’s Centre-South (new cane planting starts in late April), so we have figured a positive outlook on next year’s crop from the world’s largest origin. Moving to the second largest producer, it will be very important to monitor the onset and progress of the Indian Monsoon this coming season. We are expecting that the Monsoon will get off to a healthy start, but there are some signals pointing to the potential for dryness during the July/August period (see map above), particularly in the cane growing belt in the north. This could serve as a yield limitation, which will be discussed in more detail once we enter the new growing season.
Sugar futures up today:
=======================================
The reports that Weather Trends has been issuing regarding the global sugar supply situation has, for several months, been calling for a gradual improvement to the global balance sheet; however, we have always been less optimistic than most consensus estimates regarding the shift to surplus status. Most agencies had been figuring a number of +1.3 to +1.5 mmt for the 2010/11 (Oct/Sep) year, which is down from earlier projections in the +2.5 to +3.0 mmt range. The International Sugar Organization (ISO) recently issued a revision to their outlook, placing their expectation for the 2010/11 crop at +196,000 mt, which is down significantly from their 1.3 mmt number from last November. Given the margin of potential error on these forecasts, 2010/11 could easily remain in deficit for the current marketing year. Further, there is still the potential for poor weather over the next couple of months to negatively impact cane devoted to the next (2011/12) season, so at this stage, we are viewing a potential break-even point in the sugar market to take place in the 2011/12 crop year. Recent revisions among the majority of estimates should also serve as verification of the methods that we have developed regarding crop potential at Weather Trends.
Sugar futures up today:
No comments:
Post a Comment