Sugar nears 2013 peak ahead of Brazil cane data

June 16th, 2016


Category: Sugar

sugarharvest450x299(Reuters) – Raw sugar futures on ICE rallied on Wednesday, nearing the highest level in more than 2-1/2 years on support from a report of frost damage and expectations for bullish cane crush data in top grower Brazil.
Arabica coffee futures also firmed, as the U.S. dollar fell, though bean prices remained in a week-long range. Sterling-denominated London cocoa rose for the fifth straight session to reach a six-week high, though the market came off its highs as the British pound rose against the U.S. dollar.
In sugar, traders awaited data from Brazil’s cane industry association Unica. It was expected to show the impact of 4-5 days of crush in Brazil’s main center-south growing region lost to rain in the second half of May, they said.
Expectations for that period’s crush gathered so far ranged from 33.3 million tonnes to 33.9 million tonnes, down from 39.5 million tonnes in the first half of May.
“The number is expected to be bullish, although much of it may as usual be written into the market, especially as the first half of June numbers are expected to be bullish with even more days lost to rain in the period,” said Nick Penney, senior trader with Sucden Financial Sugar.
July raw sugar settled up 0.42 cent, or 2.2 percent, at 19.76 cents per lb, nearly reaching the highest since October 2013 of 19.92 cents that was touched on June 9.
Also bullish for sugar prices was an estimate by cane industry group Alcopar, which said Brazil’s Parana state cane
crop was expected to fall to around 39 million tonnes from 43.5 million tonnes after frosts hurt some fields.
August white sugar settled up $8.9, or 1.7 percent, at $535 per tonne, after touching a contract high of $536.20.
In coffee, September arabica futures settled up 3.05 cent, or 2.2 percent, at $1.401 per lb.
September robusta coffee settled down $5, or 0.3 percent, at $1,646 per tonne.
September London cocoa settled up 5 pounds, or 0.2 percent, at 2,297 pounds per tonne, after climbing to 2,301 pounds, the highest since May 5. The July/September spread LCCN6-U6 rallied as high as 32 pounds, with the spot contract’s premium doubling in value from the prior session.
New York September cocoa settled up $12, or 0.4 percent, at $3,116 per tonne. The July premium over September CCN6-U6 jumped to $50, a contract high.

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