Raw sugar hits six-month high

September 26, 2013

The most-active ICE raw sugar futures contract touched its highest level since late March on Wednesday, extending gains on chart signals after industry data showed recent rains have hampered cane crushing in top grower Brazil. Cocoa futures on ICE fell as favourable rains in West Africa, the world’s key growing region, slowed a speculator-driven rally, and ICE arabica coffee closed lower as excess supplies weighed.

The most-active March raw sugar contract on ICE Futures US rose 0.26 cent, or 1.5 percent, to settle at 18.19 cents a lb. The second month touched a six-month high of 18.22 cents a lb, extending gains on technical strength after Brazil cane industry data released on Tuesday was seen as bullish for sugar prices that have been pressured by excess inventories. October raw sugar futures were up 0.2 cent, or 1.1 percent, at 17.62 cents a lb, after climbing to 17.64 cents, the highest level for the spot month since May.

“We’re looking technically strong. Once we took out recent highs, we’ve turned the trend up,” said Jack Scoville, vice president for Price Futures Group in Chicago. Cane mills in central-southern Brazil reduced their output of sugar by 8 percent in the first two weeks of September from the last two weeks of August, local industry association Unica said late in the trading session on Tuesday. Output was lower than expected at 2.96 million tonnes.

The report raised expectations that upcoming data would show additional impact from rains. “The numbers were deemed bullish, with a lower crush number and a lower sugar production number as a result of rain hampering progress, which will also be a feature in the next report for the second half of September,” said Nick Penney, senior trader at broker Sucden Financial Sugar.

The ICE spot contract has rallied 10.6 percent from a three-year low of 15.93 cents a lb set in July as the low prices stirred demand and speculators turned bullish on sugar. Dealers focused on the September 30 expiry of the ICE October raw sugar futures contract. December white sugar on Liffe closed up $3.90, or 0.8 percent, at $490.80 a tonne.

ICE December cocoa finished down $30, or 1.2 percent, at $2,573 per tonne after touching a two-week low of $2,564. It was the contract’s biggest loss since the end of August. The front month contract sank further from a one-year peak of $2,657 on September 19. Liffe December cocoa was down 25 pounds, or 1.5 percent, at 1,675 pounds a tonne, after touching a three-week low of 1,670 pounds. ICE December arabica coffee futures finished down 0.60 cent, or 0.5 percent, at $1.1725 per lb, turning lower after climbing to resistance. Liffe November robusta coffee was up $10, or 0.6 percent, to settle at $1,709 a tonne.Source  Reuters

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