Raw Sugar Futures Hit 2 1/2-Week High on Output Forecast

(Wall Street Journal) – Sugar prices rose to the highest level in more than two weeks on Wednesday after the International Sugar Organization cut its estimate for this season’s global glut of the sweetener.

The London-based group said production will outpace sugar demand by 473,000 metric tons in the year that began Oct. 1, down 64% from its previous estimate of a 1.3 million-ton supply surplus. The ISO said it expects poor weather conditions to lead to lower production in the current year, but sugar output would likely rebound in 2015-16.

Raw sugar for March delivery rose 0.8% to 16.36 cents a pound, the highest settlement for the most actively traded sugar contract on the ICE Futures U.S. exchange since Oct. 24.

In other markets, cocoa for December dropped 2.4% to end at $2,851 a ton as the West African cocoa harvest progressed. The region is the source of more than two- thirds of the world’s cocoa.

“At the end of the day we’re in the middle of the harvest,” said Jack Scoville, a vice president at brokerage Price Futures Group.

Cotton futures also tumbled more than 2% on harvest expectations. The U.S. crop is on track, with about 62% of the cotton harvested as of Sunday, compared with a five-year average of 64% for this time of year.

Cotton for December dropped 2.2% to end at 61.94 cents a pound, the lowest since Oct. 2 for the most actively traded contract.

Sales of U.S.-grown fiber have slumped. In the week ended Oct. 30, U.S. exporters sold 65,000 bales of upland-variety cotton, down 23% from the four-week average.

The next export-sales report will be delayed by a day because of the Veterans Day holiday earlier this week. The U.S. Department of Agriculture is scheduled to release the weekly report at 8:30 a.m. EST on Friday.

Orange-juice concentrate for January fell 1.9% to end at $1.2685 a pound, while December arabica coffee fell 0.1% to $1.8440 a pound.