Sugar off five-week high as Brazilian real falls
Category: Sugar
(Reuters) – Raw sugar futures on ICE turned higher on late-day buying on Tuesday but remained below the prior session’s five-week high on pressure from the firm U.S. dollar.
Arabica coffee nudged down to a two-month low while cocoa prices fell, joining the weakness in larger commodity markets as the 19-market Thomson Reuters Core Commodity Index fell for the second straight day.
London softs markets readjusted after being shut on Monday for the May Day holiday.
Raw sugar prices were pressured by the weak Brazilian real , which fell against the U.S. dollar for the second straight day.
Brazil is the world’s biggest grower of sugar and coffee, and the falling local currency gives bigger returns to sales there. This, combined with weak oil prices, pressured sugar prices until a flurry of late-day buying turned prices higher just ahead of the settlement window, traders said.
A large amount of Brazilian sugar is made into ethanol.
ICE July raw sugar settled up 0.04 cent, or 0.3 percent, at 16.25 cents per lb.
The market shrugged off a Monday report that India will soon scrap an order that requires sugar mills to export excess supply.
Claudiu Covrig, senior agricultural analyst at data provider Kingsman, a unit of Platts, said he expected the flow of Indian sugar exports to China to slow in the coming months.
Strong demand for white sugar from China has buoyed the global white sugar premium, which this week was above $100 per tonne, a comfortable refining margin.
August white sugar settled up 50 cents, or 0.1 percent, at $467.90 per tonne.
Arabica coffee inched down to a two-month low.
July arabica coffee settled down 0.4 cent, or 0.3 percent, at $1.1925 per lb.
July robusta coffee settled down $9, or 0.6 percent, at $1,579 per tonne.
Cocoa futures fell despite a continued slow-down of bean arrivals in top-grower Ivory Coast.
July New York cocoa settled down $12, or 0.4 percent, at $3,205 per tonne.
London July cocoa settled down 11 pounds, or 0.5 percent, at 2,305 pounds per tonne.
Meanwhile, weather in Ivory Coast cocoa regions gave mixed signals. Abundant rain last week in some areas should support the growth of small pods during the mid-crop, but hot weather and a lack of moisture is likely to prevent flowers from turning into pods elsewhere, farmers said.
