Forexpros – Sugar futures fell to a one-month low on Monday, extending sharp losses from the previous session as a combination of easing concerns over a decline in Brazilian sugar production and a broadly stronger U.S. dollar weighed.
On the ICE Futures U.S. Exchange, sugar futures for October delivery traded at USD0.2745 a pound during European morning trade, shedding 0.4%.
It earlier fell as much as 0.65% to trade at USD0.2741 a pound, the lowest price since August 16.
On Friday, sugar futures plummeted nearly 6.7%, the biggest one-day drop since March 15 after influential sugar industry group Canaplan raised its estimate for Brazil’s sugar harvest, easing concerns over falling supplies in the world’s largest producer.
In a report Friday, Canaplan said that it expects Brazil’s sugar harvest in the 2011-12 marketing season to total 29.5 million tons, up 1.5 million tons from a previous forecast as dry weather across Brazil’s Center-South region in August and early-September boosted crops.
“We will have better quality cane for the next two to three weeks,” Canaplan said in a report. “This makes it possible to produce for a longer period.”
Sugar prices have lost as much as 14% since hitting a nine-month high of USD0.3184 a pound on August 24, as receding concerns over tightening global supplies dragged prices lower.
Brazil is the world’s largest sugar producer and exporter, with the U.S. Department of Agriculture estimating the nation accounts for nearly 20% of global production and 39% of global sugar exports.
Meanwhile, mounting concerns over a Greek debt default saw risk aversion sharpen, boosting demand for the safe-haven U.S. dollar.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.81% to trade at a three-day high of 77.67.
Dollar-denominated commodity prices typically weaken when the greenback strengthens as it makes them more expensive for holders of other currencies.
Elsewhere, on the Chicago Mercantile Exchange, wheat for December delivery tumbled 1.7% to trade at USD6.8113 a bushel, corn for December delivery fell 1.47% to trade at USD6.8538 a bushel, while soybeans for November delivery slumped 0.89% to trade at USD13.4525 a bushel.
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