Raw Sugar Falls to 10-Month Low as Rains Aid Brazil Cane Crop

Raw sugar fell to the lowest price in more than 10 months on speculation that favorable weather is benefiting cane crops in Brazil, the world’s largest grower.

Sugar production jumped 77 percent in the first half of April from a year earlier, industry association Unica said today. Regular rains will help boost the cane harvest to a record this year, Agriculture Minister Wagner Rossi told the Folha de S. Paulo newspaper.

“Weather news out of Brazil is currently positive, so we expect any rally to be sold into by producers,” Nick Penney, a Sucden Financial Ltd. trader in London, said today in a report. “This may further erode confidence among the bullish fraternity.”

Raw sugar for July delivery fell 0.48 cent, or 3 percent, to 15.37 cents a pound on ICE Futures U.S. in New York. Earlier, the price touched 15.25 cents, the lowest level for a most- active contract since June 8.

The close below the previous contract low of 15.45 cents means prices could drop to 14.88 cents, Penney said in an e- mail.

Sugar has tumbled 43 percent this year. In 2009, sugar prices more than doubled after excess rain delayed the harvest in Brazil, compounding a shortage in global supplies.

White sugar for August delivery slipped $15.10, or 3.1 percent, to $465 a metric ton on London’s Liffe exchange, after earlier touching $464.40, the lowest level for a most-active contract since April 9. The sweetener has dropped 35 percent in 2010.

--With assistance from Katia Cortes in Brasilia and Carlos Caminada in Sao Paulo.

--Editors: Michael Arndt, Steve Stroth.

source: bloomberg