Widespread rain in Brazil's center-south cane region this month and forecasts of more rain may harm cane crushing in the final stage of the harvest, producers and traders said on Monday.
Harvesting had been advancing rapdily aided by several months of dry weather, and crushing had been expected to be completed by early November. "Cane crushing is now likely to be completed only in the second half of November," said Adriano Dias, director of the Association of Sugar and Ethanol Producers of Parana state.
Parana, Brazil's second biggest cane grower, is expected to crush 32.5 million tonnes of cane this year. Dias said that the crushing rate in Parana fell 1.6 million tonnes in the second half of September, from around 2.6 million tonnes per 15-days beforehand.
The director of a group of five mills also said that wet weather could affect the crushing program. "The harvest could be delayed if the rains continue and Unica's crush forecast may not be achieved," he said.
The Sao Paulo Cane Agroindustry Union (Unica) should on Wednesday give an update on the harvest crush and the number of mills which have already finished operations. One mill has already stopped crushing cane in Parana as well as several in Rio de Janeiro and Espirito Santo states.
Unica forecast that the center-south will crush 370.6 million tonnes of cane, but many brokers and analysts put the harvest at around 360 million tonnes. However rains favour further cane growth and will raise agricultural yields, sources added.
Physical brokers are watching where the 1.13 million tonnes of raw sugar delivered to trade house Cargill at the expiry of the October New York Board of Trade (NYBOT) futures contract will be delivered.
"Cargill nominated on Monday more than 150,000 tonnes for Paranagua port for shipment in October," said a trader at an international trade house, adding that this was viewed positively by the market. Another international trade house source said that he heard that most of the sugar would be shipped in December. "People say that there was no attempt to sell on the second hand market which suggests that the sugar has a destination," the source said.
On the domestic market, lack of producer selling helped to sustain crystal sugar and ethanol prices. A 50-kg bag of 150 ICUMSAs traded at around 37 reais ex-mill, tax included, little changed from 15 days ago and much more remunerative than the world price.
Ethanol prices were also virtually unchanged with little business reported. Anhydrous alcohol, which is blended with gasoline, was offered at 0.91 real per liter with no buyers. Hydrous alcohol was offered at 0.92 real and traded at 0.90.