Raw sugar rallies as oil jumps; cocoa and coffee fall

• August white sugar rose $4.40, or 1.2%, to $363.60 a tonne as supply tightness persists, with healthy refining premiums tempting refiners to process more raws into whites.
• Rising energy prices tempt cane mills in Brazil from ramping up sugar output at the expense of cane-based biofuel ethanol.
• Rabobank said coffee fundamentals are deteriorating, with little disruption to Brazil's harvest and with coffee shops the world over reopening, but to reduced footfall.

NEW YORK/LONDON: Raw sugar futures on ICE rallied on Monday as oil prices jumped, tightness in white sugar supplies persisted and hopes grew for a resumption of economic activity as coronavirus lockdowns are eased.

Coffee and cocoa fell, however.

SUGAR

July raw sugar rose 0.4 cents, or 3.7%, to 10.77 cents per lb by 1333 GMT.

August white sugar rose $4.40, or 1.2%, to $363.60 a tonne as supply tightness persists, with healthy refining premiums tempting refiners to process more raws into whites.

European stocks rose and oil prices jumped to two-month highs as loosening coronavirus shutdowns boosted sentiment, even though the deadly outbreak has yet to be fully contained and economic readings are extremely poor.

Rising energy prices tempt cane mills in Brazil from ramping up sugar output at the expense of cane-based biofuel ethanol.

"Risk sentiment remains mixed, though oil is stabilising; optimism is in play that the worst for the global economy may be behind us. The Brazilian real will weaken ... (but) overall, we hold a very slight positive macro tilt for sugar," Marex Spectron said.

A weak real tempts Brazilian exporters to sell because it raises the value of dollar-priced sugar in local currency terms.

Speculators reduced their net short position in raw sugar on ICE Futures US by 8,996 contracts in the week to May 12 to 45,763 contracts, CFTC data showed.

Indian mills produced 26.5 million tonnes of sugar between October and May, down 19% from a year earlier, because of lower output in the drought-hit western state of Maharashtra.

COFFEE

July arabica coffee rose 0.8 cents, or 0.8%, to $1.0765 per lb.

US green coffee stocks rose by 494,299 bags to 6.5 million 60kg bags by the end of April, the Green Coffee Association said, reversing a falling trend in place since September and indicating a possible slowdown in demand.

Rabobank said coffee fundamentals are deteriorating, with little disruption to Brazil's harvest and with coffee shops the world over reopening, but to reduced footfall.

Speculators were of a different view. They raised their net long position in ICE arabica futures by 1,644 contracts to 5,283 contracts in the week to May 12.

July robusta coffee fell $5, or 0.4%, to $1,183 a tonne.

COCOA

July New York cocoa slipped $2, or 0.1%, to $2,373 a tonne.

Cocoa arrivals at ports in the world's top grower, Ivory Coast, reached 1.814 million tonnes between Oct. 1 and May 17, exporters estimated, down 5.8% from the same period last season.

Speculators reduced their net short position in New York cocoa by 343 contracts to 13,447 contracts in the week to May 12.

July London cocoa edged down 6 pounds, or 0.3%, to 1,852 pounds a tonne.