Sugar hits two-month high on tight supply outlook, arabica rises

Raw sugar on ICE jumped almost 3 percent to a two-month high on Friday, buoyed by tight supplies, while arabica coffee futures touched a one-month highh in technically driven trade. Cocoa steadied with a focus on the weather before West African mid crops. May raw sugar futures were up 0.42 cent, or 2.8 percent, at 15.24 cents per lb at 1443 GMT, after breaking above strong resistance at 15 cents and hitting a two-month high of 15.25 cents a lb.
"Deficit forecasts are increasing," said Michael Liddiard of consultancy Agrilion, referring to expectations that the crush in producers such as Thailand and India would end earlier than had been expected. May white sugar was up $7.30, or 1.7 percent, at $434.10 per tonne, having risen to $434.40, a 15-month high for the spot contract.
"Leading market commentators have been looking at the whites market in particular for Q2/Q3 and seem to be forming a consensus that the whites will be relatively tight vis-a-vis last year," said Tom Kujawa, co-head of the softs department at Sucden Financial Sugar. He was referring to expectations for tight supplies from India and Thailand. Arabica coffee futures firmed, with dealers taking stock of a report by broker Marex Spectron forecasting a small global coffee surplus in 2016/17.
"Brazil, Vietnam and Colombia (world's top three producers) are on weather watch, which poses a threat to forward supply," the Marex report said. May arabica coffee was up 1.95 cent, or 1.6 percent, at $1.2410 per lb, after rising to $1.2435, the highest since February 5. May robusta coffee was up $26, or 1.9 percent, at $1,428 per tonne. Cocoa futures on ICE held steady at near two-month highs, supported by supply concerns that the West African mid-crop could be smaller than last year.
May London cocoa was up 5 pounds, or 0.2 percent, at 2,243 pounds a tonne, after touching 2,252, the highest since December 31 for the second position. New York May cocoa was up $7, or 0.2 percent, at $3,069 per tonne, after rising to $3,077, the highest on a continuation chart since January.