Good Afternoon,

 

The open interest showed spec selling into Friday’s dip in price.

 

The October/March rallied early today from 138-over to 153-over, bringing October to 25.60 as every position made new contract highs.  As the buying tailed off, October broke through Friday’s lows to trade at 24.17, though March stayed above Friday’s low.  The decline occurred despite the CRB trading at its highest level since March.  During the weaker moments, the October/March narrowed to 118-over.  October traded last at 24.38 as October/march traded at 119-over.  The CRB is 75 higher having been over 150 higher while the dollar index is a little lower having been slightly higher.

 

The weather in the center south of Brazil is forecast to be mainly dry for the next week although some rain is expected in southern areas which could slow loading in Paranagua. Somar is now reporting that substantial rain is expected in the main cane growing areas by late September or early October after a very dry winter. This rainfall does not guarantee that dry weather caused by La Niña has concluded.   Brazilian domestic sugar prices rose 9.1% in the past week, while anhydrous ethanol rallied 4.6% and hydrous 4.2%.

 

The Minas Sugar & Ethanol Association reports expectations of a 56-million tonne crush from this crop, while to September 1st they crushed 37 million tonnes. They aim to produce 2.2 million tonnes of sugar and 1.6 billion liters of ethanol with 44% of the cane used to produce sugar. They gave no comparative figures with last year.

 

Asazgua in Guatemala forecasts 20010-11 sugar production will total 2.22 million tonnes, down from 2.34 million tonnes last year due to the wetter than normal weather.  Weather is also likely to adversely affect surrounding countries’ sugar production.

 

The Asia Development Bank reports the Pakistani agricultural industry may take two years to recover from the recent floods.

 

Regards,

 

Douglas

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