Raw Sugar Pares Gains as Market Resumes Focus on Supply Glut

(Wall Street Journal) – Sugar prices trimmed their gains late in Tuesday’s session as hefty global supplies weighed on the market.

Investors with bets that prices would fall have been taking profits from their positions since the market ended at a five-year low last week. In addition, the upcoming expiry of the October contract, weather risks to Brazil’s harvest, and an uptick in demand for raw sugar from refiners pushed prices higher. But demand petered out just above 16 cents a pound in the March contract.

Raw sugar for October delivery on the ICE Futures U.S. exchange rose as high as 14.83 cents a pound before settling 0.5% higher at 14.15 cents a pound. The March contract closed up 0.6% at 15.73 cents a pound, the highest level for the most actively traded contract since Sept. 2. The October contract expires next week.

The International Sugar Organization recently forecast that global supplies would exceed demand for this season and the next, which would be the fifth consecutive year of extra sugar.

“Weak demand remains a major problem, but mostly the ideas of big supplies after four years of surplus production remain the overriding theme,” said Jack Scoville, vice president at Price Futures Group in Chicago.

In other markets, cocoa’s rally cooled after seven straight sessions of gains on fears that the Ebola virus could spread to Ivory Coast or Ghana, which together produce about 60% of the world’s cocoa. December-delivery cocoa ended down 0.9% at $3,297 a ton. Arabica coffee for delivery in December closed up 0.8% at $1.8090 a pound, while orange juice for November delivery fell 1.2% to $1.4215 a pound. December-delivery cotton ticked 0.4% higher to 62.83 cents a pound.