Coffee closes sharply higher, raw sugar fails to follow oil up
- October raw sugar settled down 0.05 cent, or 0.4%, at 11.67 cents per lb, after gaining as much as 1.5% earlier in the session.
- December London cocoa settled down 18 pounds, or 1.1%, at 1,551 pounds per tonne.
NEW YORK/LONDON: Coffee futures closed sharply higher on Tuesday, boosted by broad-based gains in commodity and equity markets linked to positive news about coronavirus vaccine trials and a European Union stimulus deal.
The vaccine optimism also boosted Brazil's real currency , reducing dollar-based prices in local currency terms in the top exporter of sugar and coffee and potentially slowing producer sales of the two commodities.
SUGAR
October raw sugar settled down 0.05 cent, or 0.4%, at 11.67 cents per lb, after gaining as much as 1.5% earlier in the session.
Sugar closed down even as oil prices rose, a move that normally is supportive to the sweetener since higher energy prices drive Brazil mills to produce more ethanol and less sugar.
Dealers said that weak demand and the record Brazilian sugar production continues to cap any upward price move.
October white sugar settled up $4.80, or 1.4%, at $355.30 a tonne.
COCOA
December London cocoa settled down 18 pounds, or 1.1%, at 1,551 pounds per tonne.
Dealers said the prospects for main crops in West Africa remained a focus, with concerns there could be a significant global surplus in 2020/21.
"The market currently expects a slight surplus for the 2019/2020 harvest season, but a larger surplus of around 300,000 tonnes for the 2020/21 crop," Martin Hug, chief financial officer at chocolate maker Lindt & Spruengli said on Tuesday.
Lindt & Spruengli expects a slow recovery in sales from the impact of the coronavirus crisis, before they bounce back next year, the company said on Tuesday.
September New York cocoa settled down $43, or 1.9%, at $2,176 a tonne.
COFFEE
September arabica coffee settled up 2 cents, or 2.0%, at $1.0175 per lb.
September robusta coffee settled up $39, or 3.1%, at $1,317 a tonne.
Dealers cited gains of more than 2% for the Brazilian currency on Tuesday as a possible factor behind the arabica coffee jump. Farmer selling into New York from the world's largest producer tends to fall when the Brazilian currency strengthens.
They also said robusta gains have been supporting arabica as well. Robusta futures are up 7% in July, while arabica lost 1.3%.
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