LONDON: Raw sugar futures rallied on Thursday as supportive technicals and gains in the Brazilian real triggered a wave of buying, while short-covering lifted cocoa against a backdrop of improving chocolate demand.
SUGAR
October raw sugar was up 0.46 cents, or 3.41 percent, at 13.95 cents per lb by 1430 GMT, after hitting a session high of 14.07 cents.
Dealers noted a stronger Brazilian real and a more supportive technical structure lent support, helping prices break through the 10-day moving average.
"There's not really much on the fundamental side," said one dealer. "But the market held this morning and that triggered some short-term buying."
Dealers noted, however, the market risked running into physical sugar selling above the 14 cent level, which could dampen gains.
August white sugar climbed $9.90, or 2.44 percent, to $416.30 a tonne ahead of a contract expiry on Friday amid expectations of tighter deliverable supplies.
One dealer said a delivery of about 350,000 tonnes was likely.
COCOA
September New York cocoa was up $42, or 2.31 percent, at $1,863 a tonne, with dealers pointing to short-covering.
"We were somewhat oversold, so we were always vulnerable to a little bit of short covering," one dealer said. "And you're seeing the demand side of things looking a little bit more robust, which is probably supportive."
Global demand figures, released as part of Barry Callebaut earnings on Thursday, showed appetite for chocolate may finally be picking up.
September London cocoa rose 30 pounds, or 2.06 percent, to 1,484 pounds a tonne, ahead of a contract expiry on Friday.
The front-month July contract flipped to a premium to October, with dealers closely monitoring the spread for further indications of physical demand.
COFFEE
September arabica coffee rose 2.20 cents, or 1.72 percent, to $1.298 per lb, after peaking at $1.3185.
The market was also supported by the gains in the Brazilian real, which lifted prices above key resistance levels.
"The headwinds are starting to fade, with momentum presenting an early indication of building on the upside," Kash Kamal, senior analyst at Sucden Financial, said in a note.
September robusta coffee was up $34, or 1.62 percent, at $2,131 per tonne.
In Vietnam, grade 2 robusta was offered at a $10 discount to the September futures contract, narrowing slightly from a $20 discount last week, but few deals were struck as good beans were scarce.
Comments
Comments are closed.