Raw Sugar Edges Up After U.S. Data; Arabica Eases

July 25th, 2016


Category: Sugar

sugarharvest450x299(Reuters) – Raw sugar futures edged higher after U.S. data showed a trimming of the net long position held by speculators, while arabica coffee eased after the end of truckers’ strike in Colombia removed potential bottlenecks for exports.

London cocoa futures held steady, buoyed by a softer pound.

Raw sugar futures were underpinned by a softer dollar and Friday’s Commitments of Traders (COT) data showing that speculators had cut their net long position in raw sugar futures and options for a fourth straight week.

“The position is still large and represents almost 30 percent of overall open interest,” said Nick Penney, a senior trader at Sucden Financial Sugar.

“We believe a breach of 19 cents per lb may loosen the hold on these longs, but so far the market has been fairly resilient. We see no reason currently for a rally beyond 20 cents and feel the likelihood is more of a probe to the downside.”

Michael Liddiard, of consultancy Agrilion, said the market was rangebound and had seen trade buying above 19 cents per lb.

Sugar prices have been supported by a shift into deficit after years of surpluses.

October raw sugar on ICE was up 0.07 cents, or 0.4 percent, at 19.66 cents per lb at 1146 GMT, while October white sugar was down $2.50, or 0.5 percent, at $535.30 a tonne.

Arabica coffee futures extended losses after Friday’s sell-off following a deal between the Colombian government and truckers’ unions to end a 45-day strike that has hit coffee exports and pushed up inflation even higher.

“The arabica-robusta spread has narrowed on account of the larger drop in arabica prices but is still holding above 61 cents per pound, which, in our view, is indicative of the resilience in arabica demand,” Agrimoney’s Global Coffee Monitor said in a daily market report.

September arabica was down 0.25 cents, or 0.2 percent, at $1.4165 per lb, while September robusta fell by $5, or 0.3 percent, to $1,783 a tonne.

Sterling-based London cocoa steadied, supported by a drop in the pound after a survey painted a subdued picture of Britain’s manufacturing sector.

September London cocoa was flat at 2,384 pounds a tonne.

Cocoa processing in Asia increased by 2.8 percent year on year in the second quarter, climbing for the third straight quarter, industry data showed.

Traders said this was below expectations for a gain of about 5 percent.

September New York cocoa was up $16, or 0.6 percent, at $2,902 a tonne.

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