Liffe September robusta coffee ended $113 higher at $2,490 a tonne on Tuesday. Market soared after frost reached at least two minor coffee regions in top coffee grower Brazil. Liffe August white sugar closes $38.80 higher at $764.80 per tonne boosted by lower-than-expected crush data in top producer Brazil.
Liffe September cocoa ended 6 pounds higher at 1,918 pounds a tonne. Market remains rangebound with hedge selling helping to cap the advance. Brazil's Center-South sugarcane crush was down 23 percent in mid-June, compared with a year ago, at 134.6 million tonnes, cane industry association Unica said, releasing a figure that was below expectations. "The market is not catching up with the late start to the harvest," said Jeff Bauml, a senior vice president with brokerage R.J. O'Brien & Associates in New York.
The data buoyed sugar futures, with the spot contract extending its premium against the second position to a three-month high at 2.19 cents per lb. The spot contract will expire on Thursday.
"There has been a great deal of short-covering on the front New York spread, on August whites and on flat price," Nick Penney at Sucden said. The sweeteners were already strong before the data, getting a lift from the weak US dollar and strong energy complex. "Continued tightness nearby in Brazil with ports congested and backed up with vessels waiting to load," was another form of support, said Bill Raffety, senior analyst for futures brokerage Penson Futures.
The global sugar market is expected to switch into surplus as farmers respond to historically high prices. "Short term we can see tightness in the sugar market but as we move into a surplus market we expect that to drag prices lower," Barclays Capital's commodities analyst Sudakshina Unnikrishnan said.
"A colder air mass is likely to move over more strategic coffee regions in Brazil overnight that may be more problematic," said Shawn Hackett, president of Hackett Financial Advisors in Florida. This concern of possibly colder conditions in the near future, also lifted the market, dealers said.
"We still cannot forecast a damaging freeze at this time. However the situation bears close watching with the potential that temperatures could be colder than what was observed this morning," said forecaster Telvent DTN in a morning report. Gains were capped in the London market by hedging, while the New York market felt a slight lift from the firm sterling against the dollar, dealers said.