NEW YORK/LONDON: Sugar futures powered to their highest in a month on Friday and the rest of the softs complex rose on optimism that European leaders were making progress in resolving that region's debt crisis.
Global stocks gained and the euro strengthened, with markets also buoyed by surging US retails sales.
New York's March raw sugar contract rose 1.02 cents, or 3.8 percent, to settle at 27.93 cents per lb, having hit a session high of 28.05 cents. It was the highest for spot raw sugar since Sept. 20.
December white sugar futures on Liffe gained $27.20, or almost 4 percent, to end at $711.30 a tonne, and the session peak of $714.70 was the highest on a spot basis for the market since Sept. 15.
"Macroeconomic and technical factors are having a stronger bearing on prices than fundamentals," said James Kirkup, head of sugar brokerage at ABN AMRO Markets (UK) Ltd.
"All of this is pushing sugar out of the current funk it is in," said Country Hedging Inc senior analyst Sterling Smith.
The sustainability of the advance into next week is in question, however, especially given how light trading has been. On Wednesday, trading volume in raw sugar fell to a 9-1/2 month low.
Smith said sugar is dependent on outside markets, and a lack of follow-through buying could undermine the sweetener.
"While the technical picture looks positive and background 'noise' sounds supportive, we are mindful that the recent rally has occurred in thin conditions; and would offer a note of caution," Nick Penney of brokers Sucden Financial said.
"We suspect the macro issues will reemerge to dampen things down at some point, especially if the euro's recovery versus the US dollar stalls," he added in a market note.
COFFEE AND COCOA UP
Arabica coffee and cocoa futures posted gains as well.
The coffee market is warily looking at excessive rains in leading robusta producer Vietnam, a factor that has contributed to the strength of bean values, which also benefited from a weak dollar and stronger commodity market prices.
New York's December arabica coffee futures rose 1.90 cents to close at $2.3955 per lb. London's January robusta coffee futures added $27 to end at $2,031 per tonne.
Cocoa futures were given a boost by the softer dollar and a strong European grind, but bumper supplies should constrain further advances in the market.
New York's December cocoa contract went up $41 to finish at $2,671 a tonne. London's December cocoa contract added 19 pounds to end at 1,706 pounds a tonne.
Europe's third-quarter 2011 cocoa grind rose 14 percent from the same quarter last year to 377,388 tonnes, the European Cocoa Association said.
North America's grind figures are due out Oct 20.
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