Sugar futures rose in New York as signs of tighter supplies buoyed prices that last week slumped to the lowest in more than a year.

Drier weather in Brazil for the next six to 10 days will stress crops, according to forecast Maxar Technologies, and the national supply company last week cut its 2023-24 output estimate for the country. Also, Thailand’s cane production in the latest season was down more than 12% from the previous year amid drought and higher costs, the government said.

Raw-sugar futures dropped 3.1% last week, partly on a weaker Brazilian real - which encourages more exports - and optimism over Indian output amid forecasts for strong monsoon rains. Money managers have flipped to a net-bearish position for the first time since 2022.

Prices gained as much as 2.2% in New York on Monday.

Prices have begun to benefit from some bullish supply and demand news “after a brutal start to April,” The Hightower Report said in a note. Still, the direction of the Brazilian real will remain closely watched by traders “as a resumption of the downtrend in the real could spark a similar action in sugar.”

  - Bloomberg