Cocoa futures closed firm on investor short-covering while dealers monitored the development of the 2011/12 crop.
Outside markets provided some support to the softs complex with world equities lifted by strong outlooks and results from US retailers and crude oil gaining on a larger-than-expected decline in US gasoline supplies.
Raw sugar futures surged on buy-stops, technical buying after the October contract shot through the 38 percent and then the 50 percent Fibonacci retracement levels, bullish fundamentals and some spread business.
Penson Futures analyst Bill Raffety said sugar ran higher in part on a weaker dollar, strong energy prices and the fact investor buying could be seen across the softs complex. Cash buying and the possibility of higher sugar imports from China boosted the sweetener as well, he said.
October raw sugar on ICE surged 1.13 cent, or 4 percent, to 29.17 cents by 12:21 p.m. EDT (1621 GMT). Its premium to March widened to around 92 cents a lb over March, from 84 cents at Tuesday's close.
"There seems to be a trend for the trade to get out of October, however, if the Brazil crop continues to be revised lower the fourth quarter might see a decline in raws availability," Peter de Klerk, analyst at Czarnikow said.
Volume was light, down 30 percent from the 30-day norm with only 1-1/2 hours left before the end of the session, Thomson Reuters preliminary data showed.
Dealers said there was increasing caution over trading the ICE October contract due to uncertainty over where the deliverable sugar originated, with lower-quality Philippines raws expected to be included in the mix.
October white sugar on Liffe rose $21.50 to $769.80 per tonne.
COFFEE PERKS UP
Arabica and robusta coffee futures climbed as market technicals indicated potential further gains, and as investors and funds covered their shorts, triggering automatic buy orders, as the macro economic scene improved and as the US dollar slipped.
"There hasn't really been any significant change in terms of the fundamentals of the markets. The rise has been largely technical in nature," Barclays Capital analyst Sudakshina Unnikrishnan said.
December arabica coffee on ICE jumped 9.35 cent, or 3.7 percent, to $2.6435 per lb.
"Funds got themselves short and they've all come in and started covering," a London-based broker said.
November robusta coffee on Liffe was up $36, or 1.5 percent, to $2,380 per tonne.
Cocoa futures on ICE also joined the day's trend higher, on investor short-covering and as dealers eyed weather developments in West Africa.
The global cocoa market is expected to switch into deficit in 2011/12 as production falls on the year due to less favorable weather in West Africa.
"We expect supply to decline in 2011/12, leading to a 48,000 tonne deficit, which should support prices," Barclays Capital said in a commodities note. December cocoa on ICE settled up $50, or 1.7 percent, to close at $3,039 a tonne, while Liffe December cocoa ended up 13 pounds at 1,909 pounds a tonne.
Copyright Reuters, 2011