Raw-sugar futures rose to the highest in six weeks on concern that wet weather will curb yields in Brazil, the world’s largest grower and exporter. Cotton, cocoa and coffee also advanced.
A cold front will bring heavy rain this week to Brazil’s cane-growing areas, with Parana state getting as much as 130 millimeters (5.1 inches), and Sao Paulo receiving as much as 40 millimeters, slowing fieldwork, forecaster Somar Meteorologia said yesterday. The storms may disrupt sugar production that was expected to compound a global surplus. Prices tumbled 13 percent in the past 12 months, and money managers doubled their net-short positions, or bets on lower prices, in the six weeks ended June 18, government data show.
“The rains are giving prices underlying support,” Boyd Cruel, a senior analyst with Vision Financial Markets in Chicago, said in a telephone interview. “We’re seeing a lot of short covering.”
Raw sugar for October delivery gained 1.2 percent to settle at 17.34 cents a pound at 2 p.m. on ICE Futures U.S. in New York. Earlier, the price touched 17.49 cents, the highest for a most-active contract since May 13.
In the harvest season started in April, Brazilian mills may process 589.6 million metric tons of cane, up from 532.8 million a year earlier, according to Unica, a Sao Paulo-based industry group.
“This is not seasonal rain,” Michael McDougall, head of the Brazil trading desk at Newedge Group in New York, said in an e-mailed report. “This will further impact the potential crush number.”
Cotton futures for December delivery climbed 2.1 percent to 84.95 cents a pound, snapping a six-session slide.
West Texas, the main growing region of the world’s biggest cotton exporter, will have dry weather through June 28, Kyle Tapley, a meteorologist with Gaithersburg, Maryland-based MDA Information Systems Inc., said in a telephone interview. Since Jan. 1, rain in the area was 52 percent of 30-year average, which may force growers to abandon crops in non-irrigated farms, he said.
Cocoa futures for September delivery rose 0.7 percent to $2,163 a ton, while arabica-coffee futures for delivery in September gained 0.3 percent to $1.2055 a pound.