Raw sugar hits 2-month peak; arabicas gain

October 1st, 2015

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Category: Sugar

Sugar(AgWeek) – ICE raw sugar futures hit a two-month high on Wednesday before the front-month contract’s expiry, and arabica coffee extended gains on lower production and export forecasts from Brazil as well as weather worries.

Cocoa futures steadied, with upside capped by expectations of strong supplies in West Africa, the main growing region.

Raw sugar on ICE Futures U.S. rallied around 3 percent on an increasingly bullish outlook for tighter supplies in the crop year that begins on Oct. 1.

The most-active ICE March 2016 raw sugar contract traded up 0.35 cent, or 2.8 percent, at 12.81 cents per lb at 1050 GMT, after hitting a two-month high of 12.83 cents.

Traders expected a cash delivery of around 1 million tons of largely Brazilian sugar, with small quantities expected from Thailand and possibly Central America.

“The delivery itself will partially be a function of how the spread ends up but at current levels it looks as if there is a good tonage of Brazilian sugar in the tape,” a senior European trade source said.

ICE December white sugar was up $9.50, or 2.6 percent, at $371.10 per ton.

In coffee, the ICE December arabica contract traded up 0.75 cents, or 0.6 percent, at $1.2160 per lb.

“Immediate resistance holds near the $1.30 area,” said Myrto Sokou, a senior research analyst with Sucden Financial.

Brazil’s agriculture ministry lowered its 2015 crop forecast to 42.15 million bags, down 5 percent from its forecast made in June.

Brazil’s coffee exporter association lowered its outlook to 34.5 million bags in 2015 versus a previous forecast of 35 million bags.

November robusta coffee on ICE traded up $4, or 0.25 percent, at $1,580 a ton.

London December cocoa lost 5 pounds, or 0.2 percent, to trade at 2,174 pounds, dropping further from Friday’s 4-1/2 year peak of 2,256 pounds.

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