Higher sugar stocks: Lower use, not lower demand for U.S. sugar?
USDA now estimates beginning sugar stocks for the 2018/19 marketing year at 2.008 million short tons raw value (STRV). The bump in estimated stocks comes from a reduction in miscellaneous use in USDA’s February WASDE report, which is explained as an adjustment to data from cane processors and refiners. What USDA did not adjust in its monthly publication was sugar deliveries, which remained at 12.19 million STRV in 2017/18, down 0.6 percent from 2016/17 deliveries of 12.26 million STRV.
This adjustment brings the 2017/18 estimated stocks-to-use (STU) ratio from 15.6 percent in December to the new estimated value of 16.1 percent, its third-highest level in the last decade. Under the U.S.-Mexico Suspension Agreements, USDA is tasked with managing the STU to 13.5 percent.
For 2018/19, USDA now forecasts an increase in sugar deliveries of 12.27 million STRV, up 0.7 percent YOY. This doesn’t exactly match sugar deliveries from October through December 2018, the first quarter of the market year: Total deliveries for those three months are reported down by 0.9 percent YOY.
Annual U.S. sugar supply, stocks-to-use, and reference price
Source: USDA, McKeany-Flavell
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