NEW YORK/LONDON: ICE sugar and arabica coffee prices extended their advance on short-covering on Wednesday, even as they remained set to finish lower for the year, while London cocoa fell on a firmer British pound and expectations of large supplies.
London soft commodities markets reopened after being closed for Christmas and UK Boxing Day holidays.
SUGAR
March raw sugar on ICE Futures US settled up 0.23 cent, or 1.56 percent, at 14.93 cents per lb, after touching 14.94 cents, its highest since Dec. 5.
"The 14.85-14.89 range was strong resistance, and we got through it and aren't backing off yet," said a US trader, pointing to bullish chart signals. "You also have people front-running the index rebalancing."
Index funds are expected to have to buy around 60,000 lots of the commodity in January when they rebalance their investments, after sugar's price rout this year. Benchmark prices are poised to end 2017 down over 23 percent, the biggest loss since 2011.
March white sugar futures finished up $7.50, or 1.95 percent, at $393 per tonne after hitting $393.50, the highest since late November.
COFFEE
March arabica coffee settled up 2.3 cents, or 1.88 percent, at $1.245 per lb, also on support from short-covering as traders positioned themselves at year-end.
Speculators hold a record bearish bet in the commodity.
Benchmark prices are poised to end the year lower.
March robusta coffee finished down $1, or 0.06 percent, at $1,711 per tonne.
Vietnam's 2017 coffee exports are estimated to be down 20.1 percent year-over-year, the government said.
COCOA
London cocoa closed down 13 pounds, or 0.94 percent, at 1,366 pounds per tonne, extending a decline from Friday. They touched 1,346 pounds, a record low for the March contract, under pressure from a firmer British pound, dealers said.
The sterling's rise prompts traders to sell London cocoa in favor of its dollar-traded New York counterpart.
Focus remained on ample global supplies amid good weather in top grower Ivory Coast.
"With suspicions of good supplies and good arrivals coming through, there doesn't appear to be a tonic out there to lift up the market - unless these funds come out of the woodwork," a dealer said.
March New York cocoa finished up $10, or 0.54 percent, at $1,866 per tonne after jumping over 3 percent during the previous session on short-covering.
New York cocoa is on track to finish 2017 with a second straight annual loss.
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