Raw Sugar Prices Drop Too Low for Bulls; Coffee Market Jolted Awake

January 28th, 2016

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Category: Sugar

Sugar-Sacks450x299(Nasdaq) – Sugar prices broke lower Wednesday as prices dropped below a key support level, encouraging traders to pull out of long positions to stem losses.

Raw sugar for March delivery dropped 2.7% to 13.64 cents a pound on the ICE Futures U.S. exchange, on track for the lowest close since Oct. 6.

In the arabica coffee market, prices jumped, giving producers hope that bearish speculators who have recently driven down the market might be letting up.

March arabica coffee futures were up 2.7% to $1.1985 a pound, on track for their biggest percentage gain since Dec. 3.

In physical trading, much of the coffee market has been at a standstill for weeks with coffee origins quoting prices that are between 12 and 18 cents above the futures market, said Jack Scoville, vice president at Price Futures Group in Chicago.

“People’s ideas are that the world economy is going to hell in a hand basket; so, they keep selling things down and it’s gotten pretty absurd,” Mr. Scoville said.

The disconnect between futures prices and physical prices has made it difficult for producers and roasters to meet on price.

In other markets, cocoa for March fell 1.6% to $2,785 a ton, cotton for March delivery dropped 0.6% to 61.04 cents a pound and frozen concentrated orange juice futures fell 0.6% to $1.235 a pound.

Read more: http://www.nasdaq.com/article/raw-sugar-prices-drop-too-low-for-bulls-coffee-market-jolted-awake-20160127-00796#ixzz3yYFLdBoe

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