NEW YORK/LONDON: Sugar and coffee futures vaulted higher on Thursday while cocoa was mixed as the softs complex consolidated while waiting for fresh macro economic news to provide jittery investors direction on its next move.
Firmer US stocks pulled world shares higher as strong US jobs data took some of the attention away from the debt crisis gripping the euro zone.
"The macro (atmosphere) is helping to push us higher," Country Hedging senior Sterling Smith said of the softs complex. "What we need to see ... is stability to the macro (environment)."
"Financial markets and fund and investor risk aversion are more important than fundamentals at the moment" in relation to what is driving softs markets, said Carsten Fritsch, analyst at Commerzbank.
The key October raw sugar contract jumped 0.58 cent to trade at 28.20 cents per lb at 12:11 p.m. (1611 GMT). Liffe's October white sugar futures rose $21.20 or nearly 3.0 percent to trade at $745 per tonne.
Soft commodities have fared better than oil and copper markets in the recent wave of selling, underpinned by bullish fundamentals.
"Supplies are still quite tight which is lending support to sugar and coffee," Fritsch said. Nick Penney of brokerage Sucden said, "Sugar futures at times are having nothing to do with its fundamentals and more to do with risk appetite for assets, or the reduction of such risk."
The market was waiting for updated crop estimates from Brazil sugar industry group Unica expected later Thursday.
Unica is expected to revise down its current center-south crop estimate to fall in line with independent analysts that have lowered expectations for the world's leading sugar supplier recently.
Raw sugar futures have fallen by around 13 percent since hitting a contract high of 31.68 cents a lb last month on Brazil crop concerns.
COCOA MIXED, COFFEE MOVES UP
Cocoa futures were mixed, with the US bean market dominated by spread trade ahead of the spot contract's first notice day on Aug. 18.
"The fundamental situation probably has more relevance now because the net fund participation in the market is lower than it has been for a couple of months," Jonathan Parkman, joint head of agriculture at brokerage Marex Spectron said.
ICE Futures US December cocoa contract rose $15 to end at $2,886 a tonne but London's September cocoa futures fell 7 pounds to close at 1,834 pounds a tonne.
The second position cocoa market fell to a seven-month low after the International Cocoa Organization (ICCO) significantly upped its forecast for a global cocoa surplus.
Arabica coffee futures also saw heavy dealings due to hefty September/December position rolling ahead of September's first notice day Aug. 23.
The market moved higher, along with the commodity complex, on short-covering after it had fallen roughly 25 percent from the 34-year peak reached in May at $3.1375 per lb.
Premiums for robusta coffee stayed at record highs in Asia, but demand was scarce and more exporters are likely to delay shipments from Vietnam because of a shortage of beans, dealers said on Thursday.
The December arabica coffee contract gained 2.70 cents to trade at $2.4105 a lb at 12:13 p.m. while London's September robusta futures went up $55 to trade at $2,188 a tonne.
Copyright Reuters, 2011
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