
Sugar slips, ethanol tempts, but bulls fight
"The July sugar contract expired at 15.48 c/lb on June 30, pressured by weak receiver interest and poor-quality sugar, which led to a low delivery volume of 45kt. This bearish expiry overshadowed a potentially bullish UNICA report showing weather-related disruptions and low ATR, while TCH results also disappointed. Post-expiry, sugar prices struggled, raising concerns about diversion to ethanol, especially in Goiás and Mato Grosso, though logistical and contractual constraints limit flexibility. Ethanol’s recent premium stems more from sugar’s price drop than biofuel strength, with inventories stable and demand soft. Despite a bearish outlook, tight global stock-to-use ratios and recent bullish signals, like Pakistan’s 500kt import quota and lower EU crop expectations, helped prices rebound to 16.37 c/lb, easing parity concerns in key regions like São Paulo."
Sugar slips, ethanol tempts, but bulls fight
- The July sugar contract expired at 15.48 c/lb, weighed down by weak receiver interest and poor-quality sugar, leading to low delivery volume.
- Despite a bearish expiry, the UNICA report showed weather-related crushing disruptions and low ATR, though strong sugar mix.
- Ethanol premium over sugar improved in Goiás and Mato Grosso, but logistical constraints and existing contracts limit any major shift in Center-South’s aggregated sugar mix.
- Ethanol’s advantage came from falling sugar prices rather than fundamentals from its own market, with inventories stable and hydrous sales trailing last year.
- Late-week buying interest, Pakistan’s 500kt import quota, and lower EU crop expectations helped sugar rebound to 16.37 c/lb.
The July sugar contract expired at a settlement price of 15.48 c/lb on Monday, June 30, with long positions ultimately losing ground as receiver interest faded. According to traders, one of the main drivers behind this behavior was the poor quality of sugar available for delivery, which contributed to the exceptionally low volume, just 888k lots, or 45kt.
Image 1: July Historical Deliveries (‘000t)

Source: ICE, Hedgepoint
Image 2: Sugar and Hydrous Parity (São Paulo State | c/lb)

Source: Source: Bloomberg, Hedgepoint
Image 3: Hydrous Share in Fuel Demand (Hydrous/(Hydrous + Gasoline))

Source: Source: ANP, Hedgepoint
Image 4: Stock in Key Producers (Crop Year)

Source: ANP, Hedgepoint
Image 5: Global Stock to Use vs Average Prices (Oct-Sep)

Source: Hedgepoint
In Summary
Weekly Report — Sugar
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thais.italiani@hedgepointglobal.com
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