Raw sugar futures swung wildly on Thursday, rising up to near a 30-year peak as cyclone Yasi hit cane areas in Australia before a storm of profit-taking deflated the sweetener in its biggest one-day fall in over a month. Arabica coffee futures climbed steadily to close at a 13-1/2 year high for the third straight day, and robusta also hit a multi-year peak, bolstered by a shortage of high quality beans and strength across agricultural commodities.
Cocoa was little changed while the export ban in top grower Ivory Coast continued to underpin strength. Raw sugar futures fell in a profit-taking spree and heavy volume as players cashed in gains from a rally which hoisted the market to its highest level in over 30 years, on anticipated damage from Cyclone Yasi to the cane crop in Australia.
ICE March raw sugar sank 3.27 cents or 9.3 percent at 32.04 cents per lb. "It's mostly profit-taking," said Alex Oliveira, senior sugar analyst at brokerage Newedge USA. "The market just collapsed." Imports by Europe and Russia, uncertainty about sugar exports by India and worries top producer Brazil may produce more ethanol from cane given high crude prices have bolstered sugar values. "It looks like the Australia story was overbought," said Sergey Gudoshnikov, a senior economist with the International Sugar Organisation.
Arabica coffee futures continued to trek higher on chart-based momentum, tight supplies and concern the truckers' strike in Colombia could slow down coffee exports from that country where dealings are already hand-to-mouth.
ICE March arabicas rose 0.95 cent to close at $2.5135 per lb, the strongest settlement for the spot contract since June 1997 for the third straight day. ICE benchmark March cocoa inched up $6 to close at $3,358 per tonne, below last week's one-year peak of $3,420 per tonne. March/May spreading dominated volume on ICE ahead of the spot contract's first notice day February 14.
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