Raw Sugar Climbs on Renewed Demand After Slump; Cocoa, Coffee Futures Drop
Sugar rose on renewed demand following a 3.1 percent slump in the previous session. Cocoa and coffee dropped in New York.
Brazil, the world’s biggest sugar producer, isn’t showing “much interest” in selling, said Michael McDougall, a senior vice president at Newedge USA in New York. The market is “going to have difficulty” falling should the country withhold supplies, he said. The decline on Oct. 15 snapped a six-session rally.
“There seems to have been at least some physical demand,” McDougall said.
Raw sugar for March delivery rose 0.52 cent, or 1.9 percent, to settle at 27.58 cents a pound at 2 p.m. on ICE Futures U.S. in New York. The price has gained 15 percent in the past year.
Brazil may produce less next year because of drought and aging fields, Stefan Uhlenbrock, an analyst at Ratzeburg, Germany-based F.O. Licht, said today in Sao Paulo.
In the week ended Oct. 12, hedge-fund managers and other large speculators increased their net-long position, or bets that prices will climb, in futures by 4.4 percent, the first gain in two weeks, government data showed on Oct. 15.
The dollar was little changed against a basket of major currencies, erasing a gain of as much as 0.8 percent. The greenback slumped in the past five weeks, enhancing the appeal of raw materials as alternative investments.
Dollar Rally Stalls
“The dollar has lost some of its initial rally as well,” McDougall of Newedge said. “Commodities are coming back a little bit on that.”
In London, refined-sugar futures for December delivery slid 90 cents to settle at $695.30 a metric ton on NYSE Liffe.
India’s output may be 26 million metric tons in the year ending Sept. 30 as an extended monsoon lifts yields, Shree Renuka Sugars Ltd., the nation’s biggest refiner, said last week. That would exceed the 25.5 million tons forecast by the Indian Sugar Mills Association.
“Potential exports from India could put a lid on London,” said Naim Beydoun, a broker at Rolle, Switzerland-based Swiss Sugar Brokers.
In New York, cocoa futures for December delivery dropped $11, or 0.4 percent, to settle at $2,794 a ton.
In London, cocoa futures for December delivery rose 9 pounds, or 0.5 percent, to close at 1,859 pounds ($2,962) a ton.
Arabica-coffee futures for December delivery fell 0.85 cent, or 0.5 percent, to $1.856 a pound in New York.
Robusta-coffee futures for January delivery fell $2 to settle at $1,680 a ton in London.
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