Raw sugar hits 22-month high, coffee steadies
Category: Sugar
(Reuters) – Raw sugar futures on ICE touched a new 22-month peak on Tuesday, buoyed by concerns over dry weather in India, while coffee held steady, capped by a stronger dollar.
Cocoa futures firmed in spread-related trade, as the U.S. and London softs markets readjusted after a long holiday weekend.
Raw sugar futures rose as concerns over a prolonged dry period in number 2 producer India augured for a drop in output in 2016/17.
“Even if we have a good monsoon now, the crop is not going to recover,” said Carlos Mera, a senior commodity analyst with Rabobank.
Rain forecasts in top grower Brazil, as well as concerns over congestion at its ports, also fuelled buying interest.
Dealers referred to worries that a La Nina weather phenomenon after the present El Nino winds down, could bring drought to centre-south Brazil in coming months.
Forecasts for rains in the centre-south in the next few days are expected to slow the harvest, broker Marex Spectron said in a weekly report.
Speculators raised their net long position in sugar contracts to a record on ICE Futures U.S. in the week ended May 24, adding to their bullish stance for the fifth straight week, U.S. Commodity Futures Trading Commission data showed on Friday.
July raw sugar was up 0.09 cent, or 0.5 percent, at 17.61 cents per lb at 0951 GMT, after rising to the highest level since July 2014 at 17.70 cents a lb.
August white sugar was up $1.30, or 0.3 percent, at $486.50 per tonne, after reaching a contract high at $487.60.
Coffee futures hovered around three-week lows, pressured by a stronger dollar, which climbed towards a two-month high against a basket of currencies on Tuesday.
Dealers referred to support for robusta futures coming from dry weather in producing countries.
“No major robusta origin is expected to produce optimal levels,” Mera said.
July robusta coffee was down $2, or 0.1 percent, at $1,638 per tonne, still within sight of a nine-month peak of $1,707 touched on May 17.
Dealers cited a large, good quality Brazilian Arabica harvest now under way.
July arabica was up 0.85 cent, or 0.7 percent, at $1.2215 per lb.
Cocoa futures rose as the New York July/September spread CCN6-U6 widened to a $37 premium.
July New York cocoa was up $39, or 1.3 percent, at $3,044 per tonne, while July London cocoa was up 22 pounds, or 1 percent, at 2,232 pounds per tonne.
