Sugar soars as weather delays Brazilian shipments; global demand strong amid tight supplies

Sugar prices soar on global supply concerns

Sugar prices soared Friday after bad weather in Brazil slowed down shipments from that country. The pinch comes amid strong global demand and tight supplies for sugar.

Sugar for October delivery settled up 0.3 cent at 22.73 cents a pound. The contract price has risen nearly 58 percent since early May.

The recent rally occurred because rains have delayed shipments from Brazil, the world’s largest sugar producer, Lind-Waldock senior market strategist Stuart Kaufman said.

It is the latest in a string of weather-related issues that have plagued the market, from a drought in Russia to excessive rain in Indonesia.

“The adverse weather has gradually scaled back production estimates in a number of countries, including Brazil and Pakistan and Russia. The market is reacting accordingly,” said Michael McDougall, a senior vice president at Newedge.

Corn rose after the U.S. Agriculture Department’s revised production outlook came in mostly as traders expected, said Telvent DTN analyst John Sanow.

The government forecast corn production at 13.2 billion bushels, which was 2 percent less than its August forecast. The estimate remains higher than the 2009 record of 13.1 billion bushels.

Other commodities were mixed as the dollar grew stronger against other currencies. A stronger dollar makes commodities, which are priced in dollars, more expensive for overseas buyers.

Corn for December delivery rose 7.5 cents to settle at $4.7825 a bushel, December wheat fell 1.25 cent to $7.3675 a bushel and November soybeans fell 15 cents to $10.31 a bushel.

In energy trading, oil prices jumped after a pipeline that delivered oil to Midwest refineries was shut down, raising questions about how long the supply may be disrupted.

Benchmark oil for October delivery added $2.20 to settle at $76.45 a barrel on the New York Mercantile Exchange.

In other October contracts, heating oil added 3.66 cents to settle at $2.1044 a gallon, gasoline gained 3.77 cents to $1.9731 a gallon and natural gas rose 11.5 cents to $3.883 per 1,000 cubic feet.

In December metals contracts, gold lost $4.40 to settle at $1,246.50 an ounce; silver lost 1 cent to $19.845 an ounce and copper fell 3.7 cents to $3.4065 a pound. September palladium slipped $3.05 to settle at $517.55 an ounce and October platinum fell $10.80 to $1,542.50 an ounce.