NEW YORK/LONDON: Raw sugar futures on ICE rallied more than 4 percent in heavy volume to a two-month high on Wednesday, and arabica coffee also advanced, boosted partly by a strengthening in the currency of Brazil, the top producer of both commodities.
SUGAR
October raw sugar settled up 0.49 cent, or 4.4 percent, at 11.67 cents per lb, after rising to the highest price since July 5 at 11.71 cents. Volume reached 165,097 lots, the highest for the October contract.
A strengthening in Brazil's real currency provided some support, making exports less attractive in local currency terms, while position rolling out of October into March <SBV8-H9> and short-covering also lifted prices above the 100-day moving average, dealers said.
The rally came after total open interest fell for 13 straight sessions to a six-month low at 907,199 lots on Tuesday, down nearly 155,000 lots since prices rebounded above last month's 10-year low, ICE data show.
The improved performance above the 100-day moving average, which traders said attracted technical buying, has created a more bullish outlook on price charts and raised the possibility that funds may scale back a huge net short position.
Brazil's center-south region sped up cane crushing in the second half of August despite falling agricultural yields as mills confirm damage done by drought this year, cane industry group Unica reported.
Dealers said the production level was in line with expectations.
December white sugar settled up $9.50, or 2.8 percent, at $347 per tonne.
The move pushed the October discount under December <LSUV8-H9> to as much as $14.30, the biggest for the contract and in sharp contrast to a small premium four sessions prior.
The October whites contract expires on Friday.
COFFEE
December arabica coffee settled up 1.65 cent, or 1.6 percent, at $1.021 per lb.
November robusta coffee settled up $38, or 2.6 percent, at $1,516 per tonne.
Brazil exported 3.07 million bags of coffee in August, the largest monthly volume in the last two years and 33 percent more than levels in the same month a year before, exporters association Cecaf? said.
COCOA
December New York cocoa settled up $41, or 1.8 percent, at $2,325 per tonne.
The main crop season in top grower Ivory Coast outlook appeared mostly favorable, although there were some concerns about quality after recent rains, dealers said.
December London cocoa settled up 5 pounds, or 0.3 percent, at 1,649 pounds per tonne.
Comments
Comments are closed for this article.