Raw sugar and arabica coffee gained the most in a week in New York on speculation investors will have to buy futures after bets on lower prices climbed to a record. New York cocoa retreated.
Large and small speculators, excluding index funds, increased bets on falling prices of both raw sugar and arabica coffee to a record in the week ended Feb. 12, data from the U.S. Commodity Futures Trading Commission compiled by Bloomberg showed. Net-short positions in coffee prices reached 36,595 contracts, a 29 percent increase from a week earlier, while investors boosted their net-short in sugar by 31 percent to 90,426 contracts, the data showed.
Raw sugar fell 26 percent in the past year, while arabica coffee declined 31 percent. Sugar supplies are set to outpace demand by 11.5 million metric tons in the 12-months started in October, according to Lausanne, Switzerland-based researcher Kingsman SA, owned by McGraw-Hill Cos. Coffee production will be 7.4 million bags higher than consumption in the same period, a second year of surplus, Macquarie Group Ltd. estimates. Sugar and coffee are the worst performers in the Standard & Poor’s GSCI index of 24 raw materials over the past year.
“After a long period of downtrend in both sugar and coffee, traders now expect a bounce back on short covering,” Jerome Jourquin, the head of agricultural commodity derivatives at brokerage Aurel BGC in Paris, said by e-mail today.
Raw sugar for delivery in May gained 1.5 percent to 18.01 cents a pound by 5:56 a.m. on ICE Futures U.S. in New York. The sweetener added as much as 1.8 percent, the most since Feb. 11. Arabica coffee for delivery in May rose 1.3 percent to $1.4195 a pound. It advanced as much as 1.7 percent, the most since Feb. 11.
Trading volume in New York for coffee was 600 percent higher and for sugar 309 percent higher than the average in the past 100 days for this time of day, according to figures compiled by Bloomberg.
Raw sugar for delivery in March was at a premium of 0.24 cent to the May contract, reversing a Feb. 11 discount, data on Bloomberg showed. That suggests a potential physical tightness, Brisbane, Australia-based researcher Green Pool Commodity Specialists Pty, said in a report e-mailed yesterday.
A port strike in Brazil, the biggest sugar producer, may help to keep the spread “firm” as it adds to congestion created by the oilseeds and grains complex, Jourquin said. Striking workers in Brazil seized a Chinese ship yesterday at the port of Santos as union leaders pledged to intensify protests if the government refuses to alter its plan to restructure ports.
In London, robusta coffee for delivery in May climbed 0.3 percent to $2,063 a ton on NYSE Liffe and white, or refined, sugar for May delivery was 0.3 percent down at $496.20 a ton.
Cocoa for delivery in March was little changed at 1,399 pounds ($2,167) a ton in London, after falling as much as 0.7 percent yesterday. Cocoa for delivery in May slid 0.5 percent to $2,134 a ton in New York. U.S. markets were closed yesterday for the Presidents’ Day holiday.
To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.