Deutsche Bank recommended investors buy into the "compelling" sugar market
Deutsche Bank recommended investors buy into the "compelling" sugar market, which could offer gains of 25%, but cautioned over the soybeans - and a potential drop in corn prices to a three-year low.
The bank joined the growth band of commentators, including Commerzbank and Phillip Futures, to caution over the gloom over raw sugar futures, which stood at 17.66 cents a pound at 07:00 New York time (12:00 UK time), within an ace of the two-year low of 17.47 cents a pound reached last week.
Expectations of sizeable production in Brazil, which is beginning its 2013-14 crushing season, may prove unfounded if weather delays the cane harvest, with the limited surplus of processing capacity limiting mills' ability to catch-up on losses later in the year.
"Any Brazilian production lost early on to rains will not be seen this crop year," Deutsche Bank said, estimating the country's cane harvest at 585m tonnes, well below some other estimates of a crop of 600m-tonnes plus.