Sugar swung between gains and losses after touching a one-week low as investors weighed reduced output in the main growing region of Brazil, the world’s top grower, and a weakening real. Coffee advanced.
Sugar output in Brazil’s center south will be 33.7 million metric tons in 2013-14, down from a June forecast of 34.2 million tons, the Sao Joaquim da Barra-based miller Usina Alta Mogiana SA said in a report e-mailed Sept. 27. The real fell 1.9 percent against the dollar last week, the biggest drop for a 7-day period since Aug. 16. A weaker local currency increases the incentive for exports priced in U.S. dollars.
“Raw sugar is being hit by downward pressure from the weaker Brazilian real,” Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said in a report e-mailed today. “The currency of the world’s biggest sugar producer and exporter depreciated last week at a rate last seen in August.”
Raw sugar for delivery in March gained 0.2 percent to 17.78 cents a pound by 6:35 a.m. on ICE Futures U.S. in New York. The price touched 17.61 cents earlier today, the lowest since Sept. 23. Futures trading volumes were about average for the past 100 days for this time of day, according to data compiled by Bloomberg. The sweetener has gained 5.1 percent this quarter. The October contract, which expires today, rose 1.1 percent to 17.06 cents a pound.
White sugar for December delivery slid 0.1 percent to $478.30 a ton on NYSE Liffe in London.
Raw sugar futures climbed to a five-month high on Sept. 26 on expectations of reduced yields and lower output in Brazil’s center south. Producers in the area will make 134.1 kilograms (295.6 pounds) of sugar for every ton of cane crushed, Alta Mogiana estimated, against June’s 137.5-kilogram projection.
“The rally was mainly attributed to expectations of a lower output out of Brazil capped by a low ATR and several days lost to the rain,” Kingsman SA, a Lausanne, Switzerland-based researcher, said in a report e-mailed today, referring to sucrose content, or industrial yields.
Global sugar supplies will be 4.66 million tons higher than demand in the 2013-14 season that starts next month in most countries, according to Green Pool Commodity Specialists Pty., a Brisbane, Australia-based researcher. That compares with an August forecast for excess supplies of 3.33 million tons. Rising output in Asia will more than compensate for falling production in Brazil’s center south, the country’s main growing region, the researcher said.
Arabica coffee for December delivery rose 0.4 percent to $1.141 a pound in New York. Robusta coffee for delivery in November was 0.6 percent higher at $1,620 a ton in London.
Cocoa for December delivery fell 0.2 percent to $2,635 a ton on ICE. Cocoa for delivery in the same month slid 0.3 percent to 1,706 pounds ($2,757) a ton on NYSE Liffe.
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