NEW YORK/LONDON: Raw sugar futures on ICE vaulted 4.7 percent on Tuesday, marking their biggest one-day jump in 2-1/2 months on buying spurred by data that showed speculators sharply increased their short positions.
SUGAR
March raw sugar settled up 0.65 cent, or 4.7 percent, at 14.41 cents per lb, the steepest one-day rally for the spot contract since Oct. 2.
The move caused the March/May spread to widen to a 0.18-cent premium after narrowing to as much as 0.08 cent on Monday.
"We've broken out of the range we were in after we found out the funds got aggressive, and that's triggered some short covering, or some anticipation of short covering," said Michael McDougall, senior vice president of sales for ED&F Man Capital Markets.
Data late Friday showed speculators had switched to an unexpectedly large net short position, causing traders to believe the market was ripe for a short-covering rally.
Still, total futures open interest rose for the ninth straight session to reach a three-month high at 791,023 contracts on Monday, exchange data showed.
The rally boosted prices above resistance levels, triggering automatic buying, traders said.
"The shorts that were hoping that the market would come off again - I think they just bailed out," said one dealer.
Sentiment was also boosted by Brazil lifting its expectations for ethanol production and reducing its forecast for the top-grower's 2017/18 sugar cane crop.
March white sugar settled up $15.20, or 4.2 percent, at $377.20 per tonne.
COFFEE
March arabica coffee settled down 0.15 cent, or 0.1 percent, at $1.2175 per lb, after rising to $1.2245.
Arabica prices initially extended gains as traders eyed US green coffee stocks, which took their biggest monthly tumble in three years, and the US Department of Agriculture forecast global inventories will fall sharply to a five-year low.
March robusta coffee settled down $13, or 0.8 percent, at $1,713 per tonne, pressured by expectations for ample production from top grower Vietnam.
COCOA
March London cocoa settled down 10 pounds, or 0.7 percent, at 1,410 pounds per tonne.
March New York cocoa settled down $10, or 0.5 percent, at $1,912 per tonne.
Prices fell despite cocoa arrivals at ports in top grower Ivory Coast estimated below year-ago levels.
The world's biggest chocolate makers are looking for ways to keep increasingly health-conscious consumers coming back for more.
Comments
Comments are closed for this article.