July 26, 2013
ICE raw sugar posted the biggest gains since early July on Thursday, recovering from a recent three-year low, as rains in top grower Brazil spurred trade buying and further technical gains, while ICE cocoa fell back from the highest level since mid-June. ICE arabica coffee futures rallied after exchange data showed a steep drawdown in London robusta stocks.
The softening US dollar provided support to dollar-traded commodities, making them less expensive to holders of other currencies. October raw sugar on ICE Futures US finished up 0.25 cent, or 1.5 percent, at 16.39 cents per lb, as gains early in the session spurred technically driven buying, dealers said.
The initial buying may have been trade buying “as unexpected rain overnight in Brazil has led to more shutdowns,” Michael McDougall, senior director of the Brazil desk for Newedge in New York, said in a daily report. Recent heavy rains have caused mill shutdowns, stalling crushing of Brazil’s bumper cane crop and prompting a slight recovery for front-month prices that touched a three-year low of 15.93 cents per lb last week. Mills in the country’s main cane region boosted sugar output in the first half of the month after rains slowed crushing at the end of June, recent data showed. They also increased the amount of cane diverted to sugar production to 45.4 percent from 41.9 percent.
“So far at least, the mills in Brazil have been running mostly to produce ethanol,” Bunge Ltd Chief Executive Soren Schroder told Reuters after the agricultural trading house reported second-quarter earnings. October white sugar on Liffe edged up $2.50, or 0.5 percent, to settle at $477.10 a tonne.
September cocoa futures on ICE closed down $13, or 0.6 percent, at $2,347 a tonne. The contract climbed to $2,381, the highest level since June 12, in largely technically-driven buying but encountered strong resistance in the $2,350-$2,400 range, dealers said. The cocoa market will likely be in a supply deficit in 2013/14, though it will be smaller than previously forecast, with output in Ivory Coast and Ghana expected to climb and demand fragile.
December cocoa in London lost 4 pounds, or 0.3 percent, to settle at 1,591 pounds a tonne. ICE September arabicas rallied 3.55 cents, or 2.9 percent, to close at $1.2480 per lb. Arabica coffee extended earlier gains after Liffe data showed a big drawdown on robusta exchange stocks, reported after the London market closed, a US trader said. Coffee stocks fell by 17,500 tonnes to 98,250 tonnes, according to Liffe data.
Earlier gains were seen on the weakening US dollar and short-covering after the September contract fell nearly 4 percent during the previous session, dealers said. Liffe September robusta coffee rose $12, or 0.6 percent, to finish at $1,908 a tonne, reversing earlier losses.Courtesy:Reuters
Published in ZaraiMedia.com
World Agriculture News