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The last two data points out of Brazil over the progress of the harvest have also revealed bigger-than-expected percentage of cane being converted to ethanol, which supports speculation of an ongoing shift in the market.

“Whilst it is expected that the next UNICA report will still show a high sugar mix due to the good weather during July, the ethanol parity is getting higher,” Penney said, according to Reuters. “The nearby sugar price advantage is eroding rapidly.”

Meanwhile, Societe Generale warned of the oversold condition in sugar and its vulnerability to short covering, which could lead to further upward support in the event of further gains.

“Although many things have to happen to bring the sugar market in NY to a more lucrative level, we are fully convinced that we have already seen the year’s low,” Archer Consulting in Brazil said in a note.

For more information on the sugar market, visit our sugar category.