Sugar surges, modest whites delivery seen, cocoa firm

Raw sugar futures on ICE rallied four percent on Friday from over-sold positions in the biggest one-day rally in the benchmark contract since February 29, supported by an upwardly revised global deficit forecast. Cocoa was firm but gains were capped by a lower than expected North American grind, while robusta coffee futures edged up as the market's attention remained focused on recent dry weather in top grower Vietnam. Arabica coffee inched higher as traders focused on expectations for an ample arabica harvest due to start in top grower Brazil in the coming weeks.
In sugar, dealers said an upwardly revised global deficit forecast by commodities house Czarnikow, was supporting prices, which moved further away from Wednesday's six-week low. "Czarnikow are part of the reason why we have seen upside over the past two days," one senior trade source said. Another senior trade source said, "The market was over-sold and due for a correction."
Prices extended gains after Czarnikow revised its 2015-16 global sugar deficit forecast to 11.4 million tonnes from a forecast of a 8.2 million tonne deficit made in December. May raw sugar traded up 0.57 cent, or 4 percent, at 14.70 cents a lb at 1438 GMT, after falling to the weakest level since February 29 at 14.00 cents on Wednesday. August white sugar traded up $10.50, or 2.5 percent, at $429.40 per tonne. May, which will expire on Friday, was at a premium of $4.00 to August.
Traders said they expected a moderate delivery tonnage against the May expiry, possibly including Guatemalan sugar and sweetener refined in the Middle East. Cocoa futures firmed, with upside capped by lower than expected North American grindings, a measure of demand. North American cocoa grindings fell in the first three months of 2016, data from the National Confectioners Association (NCA) showed on Thursday, the region's sixth straight weak quarter and the lowest level in nearly four years.
The drop in processing was below expectations of 1 percent lower to 4 percent higher. July London cocoa was up 8 pounds, or 0.4 percent, at 2,218 pounds per tonne, while July New York cocoa was up $18, or 0.6 percent, at $3,006 per tonne. Robusta coffee regained ground, with May trading up $7, or 0.5 percent, at $1,530 per tonne as dealers kept a close watch on the weather in Vietnam. July arabica coffee futures were up 0.4 cent, or 0.3 percent, at $1.2550 per lb.