Sugar and coffee climb

White sugar futures touched a one-month high on Wednesday, supported by talk of tightness in tenderable supplies driven partly by a pick-up in demand in the physical market. Dealers noted the strength of the whites market had increased its already large premium to raws with the August whites/July raws spread climbing to a peak of around $116.
"We haven't seen these sort of premiums for a long time. I'm sure the whites refiners are selling into this," one London dealer said. The whites premium is a measure of the profitability of refining sugar. Dealers said the recent rise in the premium has reflected both African and Middle Eastern white sugar buying as well as the weakness of raw sugar prices. August white sugar was up $6.60 or 1.85 percent at $363.20 per tonne at 1439 GMT after peaking at $366.80, a one-month peak for the front month.
Dealers said the sugar market was also supported by a a report issued by Brazilian cane industry group Unica on Tuesday showing lower-than-expected sugar production in the key Centre-South region. Overall supplies of raw sugar, however, remained plentiful. "There is still too much sugar around and that is why the (raw sugar) market is struggling," one dealer said.
July raw sugar was up 0.15 cent or 1.3 percent at 11.40 cents a lb. Prices have recovered slightly after the front month slumped to a 6-1/2 year low of 11.10 cents last week. Robusta coffee futures were higher with the nearby premium widening to around $100 from a closing indication of $73 on Tuesday. The premium had been boosted by the limited availability of tenderable supplies, driven partly by hoarding by Vietnamese producers.
September robusta coffee rose $50 or 2.85 percent to $1,805 a tonne. Arabica coffee futures were also higher as the market made a second attempt to close above resistance at the 10-day moving average. Prices had failed to maintain a break above the level on Tuesday, eventually closing sharply lower. September arabica futures were up 4.25 cents or 3.3 percent at $1.3390 per lb.
A close above the 10-day moving average, which currently stands around $1.3185, could trigger a run-up towards this month's peak of $1.41 set on June 10, dealers said. Cocoa futures were slightly higher with September New York up $10 or 0.3 percent at $3,261 a tonne. September London cocoa rose 6 pounds or 0.3 percent to 2,149 pounds a tonne.