Coffee and sugar futures rose in New York, heading for the biggest gains in a week, as signs that Europe is taking more aggressive steps to stem its debt crisis eased concerns slower economic growth would erode demand.
Equities and commodities rallied after the European Central Bank unexpectedly cut interest rates and the region’s leaders increased pressure on Greece to accept a bailout. The Standard & Poor’s GSCI Index of 24 raw materials headed for a second straight gain, led by wheat, soybeans and gold. The index fell on Nov. 1 to the lowest in more than a week.
“A lot of the bad news has already been factored into prices after the declines we’ve seen recently, and so it takes only a little bit of good news to get people buying again,” Michael Smith, the president of T&K Futures & Options in Port St. Lucie, Florida, said in a telephone interview. “You’re going to see a lot more fund money coming in.”
Arabica coffee for December delivery rose 1 percent to $2.2615 a pound at 10:56 a.m. on ICE Futures U.S. in New York. A close at that price would mark the biggest gain since Oct. 24. The commodity fell 21 percent from the end of August through last month.
Raw-sugar futures for March delivery advanced 1 percent to 25.68 cents a pound in New York, heading for the biggest gain since Oct. 27. Before today, prices fell 1.4 percent this month.
Sugar shipments to China, the world’s second-largest consumer, may be higher than analysts forecast, according to Newedge Group, the largest U.S. sugar-futures broker. While most analysts estimate imports for the 2011-2012 marketing year at about 2.5 million tons, a rate of import growth similar to the past two years would boost the figure to 2.97 million, Michael McDougall, a senior vice president at New York-based Newedge, said in a report.
In London futures trading, sugar and coffee advanced on NYSE Liffe.
To contact the reporters on this story: Joe Richter in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Steve Stroth at email@example.com