Sugar little changed

September 27, 2013

Raw Sugar
Raw Sugar

ICE raw sugar futures ended little changed after touching a 4-1/2-month high on Thursday, on October/March spreading ahead of the spot contract’s approaching expiry, while Liffe robusta coffee dropped to a three-year low on a lack of buying interest. Arabica coffee trading on ICE Futures US also fell, on track for the fourth straight quarterly loss. ICE and Liffe cocoa rose in consolidative dealings after falling from a one-year high reached earlier this month.

ICE October raw sugar futures settled down 0.11 cent, or 0.6 percent, at 17.51 cents a lb, having earlier peaked at 17.67 cents, the highest level since May 8. The contract is on track to end the third quarter up about 7 percent, its first quarterly gain since the first quarter of 2012.

October open interest dropped by 16,227 lots on September 26 to 60,256 lots, or 3.06 million tonnes, with dealers expecting a possibly large delivery when the contract expires on Monday. The October/March discount widened to around 0.70 cent, the biggest in two months, from 0.56 cent on Wednesday. The most active March contract closed flat at 18.19 cents per lb. Rain in Brazil is expected to delay the harvest and lower the sugar content in cane, causing some analysts to consider cutting their production forecasts.

“Delays to harvesting as a result of bad weather in Brazil, the world’s largest producer of sugar, have been driving the price up,” Commerzbank said in a daily note. Lower cane yields in Brazil were not, however, expected to change expectations for a global surplus due to higher output estimates elsewhere.

December white sugar on Liffe ended down $2.20, or 0.4 percent, at $488.60 a tonne. Liffe November robusta coffee finished down $46, or 2.7 percent, at $1,663 a tonne, after falling to a three-year low at $1,656, ahead of a large crop from top grower Vietnam. The contract was technically oversold on the 14-day relative strength index, sitting around 28, and on track to see its second straight weak quarterly performance, down around 6 percent.

December arabica coffee futures on ICE ended down 1.60 cents, or 1.4 percent, at $1.1565 per lb, holding above the more than four-year low of $1.1395 reached earlier in the month. In cocoa, ICE December futures closed up $24, or 0.9 percent, at $2,597 per tonne, consolidating after closing 1.2 percent lower in the previous session. The contract is set to close the third quarter up 20 percent, its strongest performance in four years. ICE futures hit a one-year high of $2,659 on September 19 as speculators bet global cocoa supplies would fall short of demand. March cocoa on Liffe settled up 17 pounds, or 1 percent, at 1,672 pounds a tonne. Courtesy  Reuters

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