17th Aug 2012, by Agrimoney
Drier weather raised hopes for Australia meeting full-year cane processing targets, after a rain-plagued start to the harvest, even as prospects faded for Brazil playing catch-up from its own poor start.
Canegrowers, the Australian cane industry group, said "it looks like we will certainly hit our estimated tonnage", of processing 31m-32m tonnes of cane this year, despite a recurrence in the opening weeks of the wet weather which has marked the previous two "horror" seasons.
Cane processing, which Australian Sugar Milling Council data show coming in just short of 5m tonnes as of the end of July, had now topped 7.3m tonnes, Canegrowers said.
"After a wet start, fine weather across Australia's sugarcane regions has resulted in a flurry of activity," the group said.
Furthermore, mills were reporting "good" levels of sugar content in cane, boding well for levels of production of the sweetener, of which Australia is the third-ranked exporter after Brazil and Thailand.
'Significant leftover cane'
The comments follow the unveiling by Wilmar International, the Singapore-based agricultural trading giant, of a drop in second-quarter profits reflecting in part setbacks at its Australian sugar operations.
But they contrast with an assessment by consultancy Datagro that Brazil, which has also seen a marked revival in cane harvesting rates following early rains, will not be able to complete the harvest.
"An increasing number of producers will leave some of the crop areas without harvesting," the consultancy said, forecasting "a significant amount of leftover cane for the 2013-14 harvest".
While some Brazilian mills, including those owned by coal-to-cane operator Noble Group, are preparing to run until December to get their harvest finished, Datagro highlighted the threat of an enhanced rainy season, from November to February.
This year is expected to bring an El Nino weather typically linked to wetter-than-normal conditions in Brazil's key Centre South producing region.
Losing streak
The prospect of carryover cane in Brazil fostered a revival in New York raw sugar futures, seeking their first rise after, for the benchmark October contract, 13 consecutive negative closes.
The decline has left the market "technically oversold", Nick Penney, Sucden Financial said, adding that this may have encouraged investors with short positions to place automatic buy orders to protect their profits in case the market turns.
"It is… likely that buy stops above current levels may be heavier as everyone seems to be bearish and therefore, one assumes, short, with protective stops above."
Raw sugar for October stood 0.3% higher at 20.21 cents at 08:00 local time (13:00 UK time).
Drier weather raised hopes for Australia meeting full-year cane processing targets, after a rain-plagued start to the harvest, even as prospects faded for Brazil playing catch-up from its own poor start.
Canegrowers, the Australian cane industry group, said "it looks like we will certainly hit our estimated tonnage", of processing 31m-32m tonnes of cane this year, despite a recurrence in the opening weeks of the wet weather which has marked the previous two "horror" seasons.
Cane processing, which Australian Sugar Milling Council data show coming in just short of 5m tonnes as of the end of July, had now topped 7.3m tonnes, Canegrowers said.
"After a wet start, fine weather across Australia's sugarcane regions has resulted in a flurry of activity," the group said.
Furthermore, mills were reporting "good" levels of sugar content in cane, boding well for levels of production of the sweetener, of which Australia is the third-ranked exporter after Brazil and Thailand.
'Significant leftover cane'
The comments follow the unveiling by Wilmar International, the Singapore-based agricultural trading giant, of a drop in second-quarter profits reflecting in part setbacks at its Australian sugar operations.
But they contrast with an assessment by consultancy Datagro that Brazil, which has also seen a marked revival in cane harvesting rates following early rains, will not be able to complete the harvest.
"An increasing number of producers will leave some of the crop areas without harvesting," the consultancy said, forecasting "a significant amount of leftover cane for the 2013-14 harvest".
While some Brazilian mills, including those owned by coal-to-cane operator Noble Group, are preparing to run until December to get their harvest finished, Datagro highlighted the threat of an enhanced rainy season, from November to February.
This year is expected to bring an El Nino weather typically linked to wetter-than-normal conditions in Brazil's key Centre South producing region.
Losing streak
The prospect of carryover cane in Brazil fostered a revival in New York raw sugar futures, seeking their first rise after, for the benchmark October contract, 13 consecutive negative closes.
The decline has left the market "technically oversold", Nick Penney, Sucden Financial said, adding that this may have encouraged investors with short positions to place automatic buy orders to protect their profits in case the market turns.
"It is… likely that buy stops above current levels may be heavier as everyone seems to be bearish and therefore, one assumes, short, with protective stops above."
Raw sugar for October stood 0.3% higher at 20.21 cents at 08:00 local time (13:00 UK time).
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