| Sugar prices hovered just below normal levels Wednesday as
the market reacted bullishly to frosts in South Florida's and Louisiana's
sugar cane-growing regions.
Sugar futures closed Wednesday at 21.25 cents a pound, up a cent since
Dec. 29, the last day of trading in 2000 at the New York Board of Trade.
The price boost follows bouts of freezes New Year's Eve and last
weekend that brought South Florida's worst cold spell since 1989. Traders
expect the freeze to affect supplies in Florida, the top sugar
cane-producing state, and in second-ranked Louisiana.
This morning, the U.S. Department of Agriculture is expected to release
its monthly crop forecast for sugar cane and sugar beets, said Tom
Bickerton, an economist with the U.S. Department of Agriculture's Farm
Service Agency.
Last month, the USDA increased cane crop estimates by 122,000 tons,
which weakened prices initially.
"Other than the last day or two, the contract price (for domestic
sugar) been going down," Bickerton said Wednesday. "The USDA is
looking very hard at a situation that's been reported as the worst freeze
in 11 years."
Barbara Miedema, a spokeswoman for the Belle Glade-based Sugar Cane
Growers Cooperative of Florida, said: "Prices are beginning to show
some recovery. Within the next 30 days we'll know how well the cane is
holding up."
But, she said, the marketplace is still full of uncertainties.
"Louisiana was hurt a great deal. The potential for a decrease in
production in Florida also can play a role. It's perception in the
marketplace," Miedema said.
The federal government has not determined what it will do with the
nearly 800,000 tons of sugar it is holding after several rounds of
forfeitures this fall.
South Florida's sugar companies -- including the cooperative, with
70,000 acres; Palm Beach-based Florida Crystals, with 170,000 acres; and
Clewiston-based U.S. Sugar Corp., with 165,000 acres it owns or leases
plus 50,000 acres grown by other independents -- forfeited a total of
294,000 tons.
Sugar prices were at 19.6 cents a pound then, among the lowest prices
seen in 25 years.
Dalton Yancey, executive vice president of the Florida Sugar Cane
League in Washington, D.C., said price stabilization and a possible return
to normal levels of 22 cents a pound represent the freeze's silver lining.
"If you're the guy who lost his cane, it's not good," Yancey
said. "Nationwide, it should have a positive impact."
The extent of the damage in South Florida from last week's cold is
still not known.
About half the crop had been harvested when the freezes hit.
"We don't know. We're starting to see some of the cane heal
itself," U.S. Sugar spokeswoman Judy Sanchez said. |