London sugar futures closed sharply up on Wednesday after climbing to a five-week high on fund and trade buying as the market focused on expiry of the front-month October contract on Friday.
October settled up $16.10 at $421.10 per tonne after earlier rising to $427.00, its highest level since August 10. December finished up $20.00 at $404.10 per tonne. Total volume was 13,955 lots. "There is fund and trade buying. The shorts are leaping to cover," one trader said.
Some traders noted talk that there might be a big delivery against the expiry of the October contract, possibly including Argentine sugar, perhaps to meet Mexican demand after a recent Mexican buying tender.
The Mexican government has approved a tender to import at least 100,000 tonnes of refined sugar to halt a spike in domestic prices and guarantee supplies.
Iranian state purchasing agency the Government Trading Corporation of Iran (GTC) is tendering to buy 40,000 tonnes of bulk raw cane sugar, the GTC said on its website on Wednesday. Key sugar consuming nations are winding down their stocks ahead of big domestic harvests in anticipation of weak prices, traders said on Wednesday.
COCOA SLIGHTLY UP: London cocoa traded slightly up in switch-dominated trade on Wednesday, with light trade buying lending support, dealer said.
The benchmark December contract settled up 5 pounds, or 0.6 percent, at 850 pounds after trading between 851 and 842 pounds. Total volume was a strong 48,379 lots. "The bulk of the day's volume were roll forwards," one dealer said. "Light trade buying was keeping the market steady."
Cocoa has largely traded in a narrow range since July 20, with traders saying they were waiting for news on new West African crop expected later this month or in October.
Traders said events in Ivory Coast were not so far affecting the market.
International mediators in Ivory Coast on Friday tried to unravel a political deadlock blocking elections in the war-divided state as health experts tackled a toxic waste emergency that brought down the government.
COFFEE RISES: London coffee rose on speculative buying in switch-dominated trade on Wednesday, after five consecutive days of corrective selling pulled the market to levels considered attractive, dealers said.
The front-month September contract rose $33, or 1.8 percent, to $1,820 a tonne after trading between $1,832 and $1,806 in limited volume of 179 lots.
"There is spec on the buy side. The market tested lower, held there, and then had a probe upwards," one dealer said. "After the fall, a bounce is not altogether that surprising."
The front month has fallen about 13 percent from a 7-1/2-year high of $2,063 hit on Wednesday. The benchmark November contract settled up $46, or 3 percent, at $1,582, after rising as high as $1,594. Total volume across all the contracts was a strong 14,942 lots.
Comments
Comments are closed.