ICE sugar gains

September 20, 2013

ICE sugar
ICE sugar

ICE raw sugar futures jumped in heavy volume on Thursday, lifted by firmness in Brazil’s real against the US dollar that deterred producer selling in Brazil, while cocoa pared gains on profit-taking after hitting a one-year high. Arabica coffee trading on ICE Futures US edged up from the previous session’s four-year low, supported by currency moves, while Liffe robusta coffee rose for the second straight day after falling to a three-year low this week.

The softs complex followed other commodities higher after the Federal Reserve unexpectedly delayed plans to cut back its asset-buying program late on Wednesday. The Thomson Reuters-Jefferies CRB index, a global benchmark for commodities which tracks 19 markets, was up about 0.3 percent after rising 0.75 percent. “The funds have seemingly been given a ‘buy signal’ across the whole commodity basket by the Fed,” said Tom Kujawa, co-head of the softs department at Sucden Financial Sugar.

ICE October raw sugar futures closed 0.28 cent, or 1.7 percent, higher at 17.17 cents a lb. Open interest dropped by 17,069 contracts to 137,329 lots on September 18, exchange data showed, still relatively high ahead of expiry at the end of the month. Total volume exceeded 181,000 lots, nearly double the 250-day average, preliminary Thomson Reuters data showed. “The real strengthened after the Fed announcement. The real has been a short-term driver so far today,” said Stephen Geldart, a senior analyst at commodities house Czarnikow.

December white sugar on Liffe ended up $6.40, or 1.3 percent, at $487.50 a tonne. ICE December cocoa rose $7, or 0.3 percent, to end at $2,630 per tonne, having touched $2,657, the highest price for the front month since September 2012. The contract is technically overbought at around 71 on the 14-day relative strength index. The ICE March contract reached an intraday one-year high at $2,659, basis second position.

March cocoa on Liffe settled down 1 pound at 1,685 pounds a tonne. December arabica futures on ICE firmed 0.90 cent, or 0.8 percent, to settle at $1.1580, up from Wednesday’s lowest level since July 2009 at $1.1395, pressured by expectations of an abundant on-year crop next year. “We’re probably going to see weaker levels in arabicas in the near term,” a London-based coffee futures broker said. Liffe November robusta coffee closed up $7, or 0.4 percent, at $1,687 a tonne, consolidating higher for the second straight day from Tuesday’s three-year low at $1,660. Courtesy Reuters

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