NEW YORK/LONDON: Raw sugar futures on ICE surged 6 percent on Monday to their highest in nearly three weeks, supported by higher crude prices, weather concerns in top growers Brazil and India, and technical factors, dealers said.
SUGAR
* March raw sugar settled up 0.72 cent, or 6 percent, at 12.65 cents per lb, rebounding from last week's three-month low of 11.69 cents.
* Sugar prices were lifted by the crude rally, dealers said. Oil prices climbed over 2 percent on OPEC production cuts and steadying equities markets.
* Sugar and oil prices are correlated because in Brazil, a top producer, cane can be used to produce either the sweetener or ethanol.
* Drought in central India and erratic rains in Center-South Brazil also contributed to the short-term price rebound, Marex Spectron said in a report.
* Technical factors were also at play, dealers said. The move above 12.43 cts/lb was constructive and enabled further gains, one US trader said, as that level represents a 62 percent Fibonacci retracement of the Dec. 19 high of 12.88 cts/lb and the Jan. 3 low of 11.69 cts/lb.
* Prices were also still getting some support from the gains the Brazilian currency made last week, dealers said. A stronger currency discourages producer selling of dollar-denominated commodities like sugar and coffee.
* March white sugar settled up $13.80, or 4.2 percent, at $344.80 per tonne.
COCOA
* March New York cocoa settled up $49, or 2.1 percent, at $2,410 per tonne.
* May London cocoa was up 24 pounds, or 1.4 percent, at 1,773 pounds a tonne.
* Fund buying drove the recent run-up in prices which saw the market climb last week to a 5-1/2 month high of 1,795 pounds, dealers said.
* Speculators switched to a net long position in the week to Dec. 31, exchange data showed.
* Fundamental factors were also supportive, dealers said. Dry weather in top grower Ivory Coast has stoked concerns about the country's main crop, farmers said.
* Still, cocoa arrivals at Ivorian ports between Oct. 1 and Jan. 6 were 17 percent higher compared to last year, exporters estimated, though the pace of arrivals has been decreasing.
COFFEE
* March arabica coffee settled up 1.15 cent, or 1.1 percent, at $1.0275 per lb.
* Buyers and sellers of specialty coffee, increasingly worried about future supplies of high quality beans, are finding new ways to price their coffee after benchmark US futures hit a 13-year-low in late 2018.
* March robusta coffee settled down $3, or 0.2 percent, at $1,542 per tonne.
Comments
Comments are closed for this article.