Spot raw sugar futures rose on Friday, sharply lifting the March contract's premium over May to a five-week high as position rolling dominated dealings. New York cocoa steadied after earlier pressure from the weak British pound. The 19-commodity Thomson Reuters CoreCommodity Index fell for the sixth straight session.
March raw sugar settled up 0.09 cent, or 0.7 percent, at 13.67 cents per lb, and marked its third consecutive weekly gain. March moved to a premium as high as 0.13 cent over May, from a 0.01 discount the prior session, potentially indicating nearby demand as the March contract nears expiry at the end of the month.
May white sugar settled up $1.40, or 0.4 percent, at $358.50 per tonne. The front month, which expires on Tuesday, had an open interest of 14,080 lots at the close of business on Thursday. "It seems unlikely with three sessions to go the delivery will be large," said Tom Kujawa, co-head of the softs department at Sucden Financial.
May New York cocoa ended the session flat at $2,060 per tonne but closed the week down 1.2 percent, its first weekly loss this year. Dealers said a short covering rally appeared to have stalled as the market traded within the prior session's range for the second straight session, amid forecasts for a second consecutive global surplus in 2017-18. Ecobank, in a report on Friday, forecast an Ivory Coast cocoa crop this season of 1.9 million tonnes, marginally below last season's estimate of 2.0 million.
The bank also forecast an average cocoa price of $1,950 a tonne in 2018. March London cocoa settled up 8 pounds, or 0.6 percent, at 1,468 pounds per tonne. May arabica coffee settled down 1.1 cents, or 0.9 percent, at $1.238 per lb. Selling by producers in top-grower Brazil prevented stronger gains, traders said, with a large 2018-19 crop expected. Meanwhile, January exports from there were down.
"We think that lower Brazilian production in the biennial 'off-year' and strong demand should support the prices of arabica and robusta coffee this year," said Capital Economics in a note, calling for arabica prices to reach $1.40 and robusta $1,900 per tonne by the end of 2018. May robusta coffee settled up $1, or 0.06 percent, at $1,769 per tonne.