Sugar extended gains in New York on speculation investors have started buying futures after bearish bets reached a record and millers in leading producer Brazil directed more cane to making ethanol. Cocoa retreated.
Large and small speculators excluding index funds boosted their net-short position, or bets on lower prices, to a record 121,030 contracts in the week ended June 11, U.S. Commodity Futures Trading Commission data showed. Millers in the center south, Brazil’s main growing region, used 58 percent of all the cane processed to make ethanol at the expense of sugar in the second half of May, data from industry group Unica showed. That’s up from 52 percent in the same period a year earlier.
Sugar rallied as much as 3.6 percent in the last trading session to 17.12 cents a pound, a one-month high. Price gains followed a rally in ethanol futures on the BM&F Bovespa, Brazil’s futures exchange, a day earlier. The biofuel used in flex-fuel cars gained as much as 2.4 percent on June 13 to 1,075 reais ($500) a cubic meter (35 cubic feet), data on Bloomberg showed.
“The rally was partly explained as a late reaction to the Unica figures,” Kingsman SA, a unit of McGraw-Hill Financial Inc. (MHFI)’s Platts, said in a report e-mailed today. “We may have seen a temporary bottom, but it is too early to say whether it becomes more than that. The funds, however, are very short and once they start short-covering their buying may snowball.”
Raw sugar for delivery in October was 0.4 percent higher at 17.15 cents a pound by 6:44 a.m. on ICE Futures U.S. in New York, after rising to 17.24 cents, the highest since May 14. White, or refined, sugar for delivery in August added 1.4 percent to $491.20 a metric ton on NYSE Liffe in London.
Cocoa for September delivery was down 0.4 percent at $2,244 a ton on ICE. Cocoa for delivery in July fell 0.5 percent to 1,457 pounds ($2,288) a ton on NYSE Liffe.
Ivory Coast, the top cocoa grower, will refund exporters and processors buying undersized beans from June 17 to July 31, industry regulator Le Conseil du Cafe-Cacao said on June 14. The move comes after farmers said they weren’t able to sell supplies because dry weather left beans too small to meet minimum requirements. Growers are harvesting the smaller of the two annual crops that runs from April to September.
Arabica coffee for September delivery gained 0.6 percent to $1.245 a pound on ICE. Robusta coffee for September delivery fell 0.3 percent to $1,758 a ton in London.
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.