Sugar Jumps Most in Four Weeks on Brazil Rain

(Businessweek) – Sugar futures gained the most in four weeks on speculation that rain may reduce output in Brazil, the world’s largest grower. Coffee, orange juice and cotton advanced, while cocoa fell.

Heavy precipitation across the Brazilian states of Sao Paulo, Minas Gerais and Parana may impede cane fieldwork, and rain will continue this week, Steve Silver, a meteorologist at MDA Information Systems in Gaithersburg, Maryland, said in a telephone interview. Sugar output in the Center South, the top growing region, dropped 8.8 percent to 2.4 million metric tons in the first half of July from a year earlier, Unica, an industry group, said yesterday.

“Every rain delay is adding up to the possible reduction in the crop and allows less leeway for more problems later in the season,” Michael McDougall, the head of the Brazil desk at Newedge in New York, said in a telephone interview. “The bears have less ammunition because the anticipated recovery in the crush is not happening. They got some rain last night and some mills had to shut down, so it takes more time for the fields to dry out.”

Raw sugar for October delivery rose 1.4 percent to 16.36 cents a pound at 12:01 p.m. on ICE Futures U.S. in New York. A close at that price would mark the biggest gain for a most-active contract since June 21. Through yesterday, the price dropped 17 percent this year amid a global surplus.

Arabica-coffee futures for September delivery climbed 1.4 percent to $1.229 a pound on ICE. Yesterday, the price tumbled 3.8 percent, the most since June 12.

Orange-juice futures for September delivery rose 0.2 percent to $1.4635 a pound. Through yesterday, the price jumped 24 percent this year on concerns that output will drop in Florida, the biggest U.S. grower.

Cotton futures for December delivery rose 0.7 percent to 86.34 cents a pound.

Cocoa futures for September delivery fell 0.6 percent at $2,347 a ton.