Sugar rallied to a two-month high on Wednesday, buoyed by strong demand ahead of Ramadan while ICE cocoa closed firmer as short speculators took cover amid position rolling. Coffee futures settled higher as the market consolidated from recent volatility and dealers eyed top producer Brazil's harvest.
ICE July raw sugar jumped 0.60 cent, or 2.5 percent, to finish at 24.95 cents per lb, the highest settlement for the spot contract since April 25. "We continue to be surprised by the current rally and can only put it down to the trade in general having run short of the market over the past month or so," said Nick Penney of brokerage Sucden Financial, referring to the upside in sugar futures in recent weeks.
Jonathan Kingsman, managing director of Lausanne-based consultancy Kingsman SA, said that if the European Union approves exports of around 700,000 tonnes of refined sugar later this year, the shortages should ease. ICE September cocoa futures rose $20 to settle at $2,921 a tonne.
US cocoa volume was heavy, after setting a daily high on Tuesday at nearly 45,700 lots trading, with the focus on the July/September spread that pushed the spot contract to a premium for the first time since May 10. ICE July arabica coffee rose 0.85 cent to close at $2.6385 per lb.
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