Sugar rose to a five-week high as surging demand for cane-based ethanol in Brazil, the world’s top producer of the sweetener, signaled a smaller global surplus. Coffee and cocoa gained, while cotton and orange juice fell.
Brazil’s ethanol use may more than double in the second quarter from the first, Datagro, a research company in Barueri, Brazil, said today in a report. In the year that ends Sept. 30, the global sugar surplus may be 8.32 million metric tons, 19 percent less than forecast. Sugar futures tumbled 17 percent in the past 12 months as supplies outpaced consumption.
“This is the first good news we have seen in a while and should support prices in the near term,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in an e-mail.
Raw sugar for October delivery advanced 1.3 percent to settle at 17.29 cents a pound at 2 p.m. on ICE Futures U.S. in New York. Earlier, the price reached 17.41 cents, the highest for a most-active contract since May 13. Trading volume doubled compared with the average in the past 100 days for this time, according to data compiled by Bloomberg.
In the week ended June 11, money managers and other large speculators boosted net-short positions, or bets on a price drop, to 88,140 futures and options, the highest since at least June 2006, government statistics showed on June 14.
The rising demand for ethanol and the smaller surplus are “enough to shake some shorts out of the market,” Smith said.
Arabica-coffee futures for September delivery rose 0.7 percent to $1.2435 a pound on ICE.
Cocoa futures for September delivery increased 0.3 percent to $2,216 a ton in New York.
Cotton futures for December delivery dropped 0.8 percent to 86.6 cents a pound, the third straight decline.
Orange-juice futures for September delivery slid 1.7 percent to $1.4335 a pound. Earlier, the price reached $1.4265, the lowest since May 22.