LONDON: ICE raw sugar extended its recovery on Wednesday, steadying around the 12-cent mark as the dollar slid further and oil prices recovered.
Arabica coffee extended falls after plunging to one-month lows on Tuesday.
October raw sugar was up 0.09 cent, or 0.8%, to 12.17 cents per lb by 1405 GMT, having closed up 2.7% on Tuesday.
The dollar fell as markets increased bets on more policy easing from the US central bank, while oil prices jumped for a second day.
Rising energy prices can prompt Brazilian cane mills to ramp up cane-based ethanol output instead of sugar, while a weak dollar makes dollar-priced sugar cheaper for non-US investors.
"We remain neutral raw sugar with our second half 2020 average price forecast unchanged at 12.25 cents/lb. We continue to expect (prices at) 14 cents/lb in 2021 as oil prices continue to recover," Citi said in a note.
December white sugar rose $1, or 0.3%, to $354.30 a tonne.
Deliveries against the October white sugar contract which expired on Tuesday, were seen by traders around 346,000 tonnes, a relatively high amount that indicates good demand.
December arabica coffee fell 2.5 cents, or 2%, to $1.1960 per lb, having lost nearly 10% of its value in the last two sessions amid forecasts for rains in top producer Brazil.
"The market overreacted to the downside on the back of these rains, but in our view a correction was well overdue," Rabobank said in a note.
"Wherever we look we see weakness in fundamentals," added the bank.
November robusta coffee fell $7, or 0.5%, to $1,384 a tonne.
December London cocoa fell 27 pounds, or 1.5%, to 1,812 pounds per tonne, having hit its highest since mid May on Tuesday amid political tensions in the Ivory Coast.
December New York cocoa fell $50, or 1.9%, to $2,617 a tonne.
A dealer said bets the upcoming third-quarter cocoa grind, a measure of demand, would show an improved reading were also supporting prices.
Indonesia's processed cocoa export volumes in the first half were up 5.29% from a year ago.
Comments
Comments are closed for this article.