Raw Sugar Settles 1% Lower

Sweetener Dips to Three-Year Low Below 16 Cents

(The Wall Street Journal) – Raw-sugar futures fell below 16 cents a pound for the first time in more than three years, as Brazil’s currency fell, raising expectations of more supplies on the global market from the world’s biggest supplier.

Raw sugar for October on ICE Futures U.S. dipped to 15.93 cents a pound in intraday trade. The contract settled 1% lower at 16 cents a pound, the lowest active-month settlement since June 29, 2010.

The drop in sugar prices “is just currency related,” said Michael McDougall, senior vice president at brokerage Newedge in New York. “The market’s just come under pressure again” as the real weakened in intraday trade.

A weaker Brazilian currency encourages growers and exporters to sell the sweetener abroad since they would receive more reais back for products sold abroad in U.S. dollars.

The real was trading at BRL2.2509 against the U.S. dollar, after trading as high as BRL2.2089 against the dollar, according to CQG.

Cotton futures fell on heavy rains in Texas, the top U.S. cotton-growing state.

Cotton for delivery in December lost 0.9% to settle at 84.37 cents a pound.

“There’s plenty of rain,” said Charles Aldrich, a Lubbock, Texas-based meteorologist for the National Oceanic and Atmospheric Administration. He said heavy rain will likely fall in major cotton-growing areas of West Texas overnight, providing moisture that is needed for the dry soil.

“A lot of the rain that is falling is getting soaked into the ground really fast because of how dry it is,” he said. “We’re not really worried about any flooding issues.”

Cocoa futures for September delivery gained 3.1% to settle at $2,289 a ton, the highest settlement for the most-active contract since June 13.

Traders were likely covering short positions, or bets that prices would fall, said Citigroup  C +0.04% futures specialist Sterling Smith, ahead of the North American second-quarter cocoa grindings figures. The National Confectioners Association, a trade group, is scheduled to release the figures on Thursday afternoon. Mr. Smith estimated that grindings rose 3.1% in the April-June period.

Arabica-coffee futures surged on colder weather expected for some coffee-growing areas of Brazil later this week. Brazil is the world’s top grower and its arabica harvest is in full swing.

Arabica for delivery in September rose 2.2% to end at $1.2595 a pound, a five-week high.

Orange-juice futures ended 2.3% higher at $1.4260 a pound, a four-week high, in light volume.