(Reuters) – Raw sugar and coffee futures rose in technically driven buying on Tuesday, buoyed by a weaker dollar, while New York cocoa extended gains after a big rally in the previous session.
The softer dollar, pressured by last week’s surprisingly weak U.S. second-quarter growth numbers, underpinned soft commodities, making them cheaper for holders of other currencies in light summer trading volumes.
The upside in sugar futures was limited by a brisk cane crush in centre-south Brazil.
“The longer-term picture may be persuading funds to hold onto longs anticipating a further and higher leg up later in the season,” said Nick Penney, a senior trader with Sucden Financial Sugar.
“It will be largely a matter of whether these have the patience to ‘hold’ for the longer term instead of liquidating.”
The sugar market has been supported by a shift into deficit after several years of surpluses.
October raw sugar was up 0.29 cent, or 1.5 percent, at 19.10 cents per lb at 1132 GMT.
October white sugar was up $8.40, or 1.6 percent, at $529.10 per tonne.
Coffee rose on chart-based buying in light volumes, with arabica’s gains capped by ample new crop Brazilian supplies.
Robusta coffee futures were underpinned by tight global supplies and subdued roaster activity in the summer period.
September arabica was up 0.95 cent, or 0.7 percent, at $1.4440 per lb. September robusta was up $7, or 0.4 percent, at $1,825 per tonne.
New York cocoa futures extended this week’s advance after surging more than 4 percent in their biggest rally in six months on Monday.
September New York cocoa was up $35, or 1.2 percent, at $2,961 per tonne. This is in sharp contrast to the five-month low of $2,815 reached on Friday.
Dealers said the cocoa market looked set for a large global deficit in the current 2015/16 season and the recent decline in prices had created a buying opportunity.
London cocoa prices followed the New York market higher, with September London cocoa up 20 pounds, or 0.85 percent, at 2,376 pounds per tonne.
