ICE sugar rises sharply

LONDON: ICE raw sugar futures rose to a four-week high on Friday, boosted both by technically driven buying and broad-based gains in commodity markets.

Cocoa and arabica coffee futures also advanced as a wide range of commodity markets were buoyed by sentiment that there has been European leaders were making progress towards agreeing a plan to resolve the euro zone debt crisis.

ICE March raw sugar futures traded up 1.05 cents or 3.9 percent at 27.96 cents a lb at 1420 GMT after rising to a peak of 28.05 cents, the highest level for the contract since September 16.

"Macroeconomic and technical factors are having a stronger bearing on prices than fundamentals," said James Kirkup, head of sugar brokerage at ABN AMRO Markets (UK) Ltd.

Crude oil and many other commodity markets rose on Friday with the Reuters-Jefferies CRB index rising 1.7 percent to 316.15 points, its highest level in more than three weeks.

Global stocks also gained and the euro strengthened on Friday boosted partly by optimism that Europe is on track to resolve its debilitating sovereign debt crisis.

"While the technical picture looks positive and background 'noise' sounds supportive, we are mindful that the recent rally has occurred in thin conditions and would offer a note of caution," Nick Penney of brokers Sucden Financial said.

"We suspect the macro issues will re-emerge to dampen things down at some point, especially if the euro's recovery versus the US dollar stalls," he added in a market note.

December white sugar futures on Liffe rose $29.30 or 4.3 percent to $713.40 a tonne.

Cocoa futures on ICE also rose with sentiment boosted by a sharp rise in the European third-quarter cocoa grind.

Europe's third-quarter 2011 cocoa grind rose 14.0 percent from the same quarter last year to 377,388 tonnes, the Brussels-based European Cocoa Association said on Thursday.

North American grind data is due to be issued on Oct. 20.

ICE December cocoa was up $40, or 1.5 percent, at $2,670 a tonne.

A rise in the value of sterling to a one-month high against the dollar helped to cap gains on Liffe with March up 15 pounds or 0.9 percent to 1,720 pounds per tonne.

Arabica coffee futures on ICE joined the advance as the dollar weakened and commodities climbed.

December arabica coffee futures on ICE rose 1.65 cent or 0.7 percent to $2.3930 per lb while January robusta coffee on Liffe was up $21 or 1.05 percent at $2,024 per tonne.

Dealers said expectations of a big robusta crop in top producer Vietnam capped upside potential for prices.

Copyright Reuters, 2011