Brazilian markets had positioned for a Flávio Bolsonaro win. They got Lula, and the real took its largest drawdown since 1999, falling nearly 8% intraday on concern about the country’s budget deficit. NY11 raw sugar futures fell close to 5% in the same session.
Where the currency settles from here depends on who takes the finance ministry and what the fiscal plans look like. A recovery toward more realistic levels would be a short-term support for sugar, though the move lower has probably already pulled forward some producer selling.
Everything else was quieter. MAPA’s second-half September figures show the excessively wet weather cutting this season’s output while possibly improving prospects for 2027/28: centre-south sugar production fell 6% on the year in the period as cane crush dropped 2.9%. Hydrous ethanol prices kept climbing, with the CEPEA index up 1.9% on the week and anhydrous up 10.1%, and São Paulo mills on course for their highest monthly ethanol sales of the season.
Europe’s campaign is coming in mixed, with weaker yields in the Netherlands and visible weather and pest damage in France, against stocks high enough to cap prices. India extended its duty-free raws import window to the end of December after limited uptake.
Fund positioning grew slightly to a net long close to the extreme last seen in October 2016, which was followed by a prolonged downturn.
Read the full global sugar market analysis here.
