Sugar-Supply Tilt
Neutral
Net tilt +0.49 · ≥ +0.5 tightening (bullish) / ≤ −0.5 easing (bearish)
+0.04
Parity (leading) z -0.08 · near-normal
Sugar-vs-ethanol netback parity (SEP), seasonally z-scored. Above band = sugar-favored → more sugar → bearish.
-0.14
Mill-mix (realized) z +0.48 · near-normal
Realized CS sugar-mix % vs its multi-year band (CONAB). Above band = mills already maxing sugar → bearish.
+0.60
Demand (tension) z +2.99 · high
Hydrous pump parity vs the 70% breakeven (ANP). Ethanol competitive → cane pulled to fuel → bullish.
Read positive as sugar-supportive: cane pulled toward ethanol,
so less sugar is made — bullish NY11. Negative is sugar-favored:
mills max the sugar mix — bearish. This is a deliberately transparent sum — parity leads,
the CONAB mill-mix confirms, ANP demand is the tension underneath. The netback basis, ex-mill wedge and
blend weights are documented starting constants pending calibration; weigh the components, not just the headline.
Parity (SEP)
1.05
seasonal-z -0.08
Sugar netback
R$1.77
per kg ATR
Ethanol netback
R$1.68
per kg ATR (ex-mill)
CS sugar-mix
47.7%
safra 2026/27
Each route valued as R$ per kg of recoverable sugar (ATR): the sugar leg is NY11 × BRL/USD × mill-realization basis; the ethanol leg is the ANP hydrous pump price bridged to an ex-mill netback. When the sugar line pulls above ethanol (SEP > 1) mills make sugar; when ethanol leads (SEP < 1) cane is diverted to fuel — the price-relevant supply lever.
This is the second energy→ag hinge, the sibling of gas→urea: when crude and gasoline fall, ethanol
weakens and mills pivot to sugar — an energy shock landing on the sugar balance sheet. Current parity
SEP 1.05 (sugar-favored),
seasonally below its August 2026 norm.
What the mills actually did, from CONAB's per-safra cane survey: the share of recoverable sugar (ATR) turned into sugar rather than ethanol, reconstructed on an ATR basis. The current safra is highlighted. 2018/19–2019/20 near 35% (ethanol-favored) and 2023/24+ near 49–51% (max-sugar) are the realized regimes the parity is meant to lead. Source: CONAB.
Parity sets the incentive; the mill-mix is the realized allocation. When the two disagree — parity says
ethanol but the mix keeps climbing to sugar, or vice versa — that divergence is the interesting signal.
Current safra 2026/27 at 47.7%
vs a 45.92% multi-year median.
Cane crushed
705.2 MMT
2025/26 673.3 → 2026/27 (+4.7%)
Sugar
42.9 MMT
2025/26 44.2 → 2026/27 (-2.9%)
Cane ethanol
30.0 bn L
2025/26 27.3 → 2026/27 (+9.7%)
Corn ethanol
11.9 bn L
2025/26 10.2 → 2026/27 (+17.0%)
CONAB's own forward estimate, from the spreadsheet published with each cane bulletin. Colour follows the sugar read, not the sign: falling sugar output is sugar-supportive. Cane ethanol is CONAB's ethanol total minus corn ethanol — the total includes both.
CONAB's 2026/27 forecast has Brazil crushing 705 MMT of cane, up 4.7% — yet sugar output falls 2.9% to 42.9 MMT while cane ethanol climbs 9.7%. More cane and less sugar is the mill-mix decision showing up in CONAB's own numbers, and it points the same way as the parity tilt above. Corn ethanol, which is not cane at all, is forecast at 11.9 bn L (+17.0%) — the ethanol pool is increasingly supplied by something the cane balance does not control.
At an energy-equivalence near 70%, flex-fuel drivers switch to hydrous ethanol below the line and to gasoline above it. Sustained sub-0.70 keeps domestic ethanol demand — and mill ethanol netbacks — firm, pulling cane away from sugar. SP pump prices, ANP. (Sales-volume demand leg is a planned enrichment; v1 uses the pump parity.)
A signal is only worth reading if it fired correctly when the answer is already known. Across the
crude-collapse sugar pivot (2020), the low-sugar ethanol stretch (2019) and the high-price max-sugar run
(2023), the tilt lands on the right side each time — validation of direction, not a promise of magnitude.
| Data month | Regime | Parity | Realized mix | Signal (tilt) |
|---|
| 2019-06 | Ethanol-favored (2019/20 low-sugar) | SEP-z -0.41 | mix-z -2.90 (35.2%) | Tightening (+1.38) |
| 2020-05 | Crude collapse → sugar pivot (2020/21) | SEP-z +1.36 | mix-z +0.33 (46.9%) | Easing (-0.61) |
| 2023-06 | High NY11 → max sugar (2023/24) | SEP-z +3.00 | mix-z +1.24 (49.5%) | Easing (-2.15) |