LONDON: Raw sugar prices on ICE rallied on Tuesday after hitting seven-week lows in the previous session as the market came under pressure ahead of the front-month contract expiry, while London cocoa touched a nine-month high.
SUGAR
July raw sugar rose 0.22 cents, or 1.8 percent, to 12.53 cents per lb, having hit its lowest since early March on Monday at 12.30 cents.
May raw sugar, which expires later this session, traded at a discount of 67 cents to July, indicating poor nearby demand. On Monday the discount nearly doubled to 70 cents from Friday's 39 cents.
"The widening discount (on Monday) really undermined confidence in the price. What we saw was complete capitulation," one dealer said. He added that deliveries against the May contract were expected to be small, with many having rolled forward their front-month positions.
Helping sugar recover, oil prices topped $73 on political turmoil in Venezuela, and support from Saudia Arabia for OPEC production cuts.
Higher oil prices can encourage Brazilian cane mills to produce more ethanol than sugar.
Sugar has largely been stuck in the 12.50-13 cents trading range since the beginning of March, though it tested the downside of that range on Monday.
ICE August white sugar rose $3.10, or 0.9 percent, to $337.70 a tonne.
COCOA
July London cocoa was flat at 1,796 pounds a tonne. It hit its highest since mid-July at $1,806 earlier, before coming under pressure as sterling rallied on hopes Brexit talks have progressed.
July New York cocoa fell $6, or 0.3 percent, to $2,377 a tonne, having touched its highest in a week and a half.
Cocoa arrivals at ports in top grower Ivory Coast reached 1.841 million tonnes between Oct. 1 and April 28, exporters estimated on Monday, up about 14 percent from the same period last season.
COFFEE
ICE July arabica coffee rose by 2.1 cents, or 2.2 percent, to 94.75 cents per lb.
Brazil's real rose versus the dollar, discouraging producer selling of dollar-priced coffee.
Although coffee prices have steadied since plunging to more than 13-year lows, a massive harvest in Brazil continues to weigh.
July robusta coffee rose $8, or 0.6 percent, to $1,411 a tonne.
ICE certified arabica coffee stocks have fallen to their lowest since mid-December, though they remain high overall at 2.45 million bags.
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