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.
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.
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.
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.