Sugar Climbs on Economic Outlook; Coffee, Cotton, Cocoa Rise
Sugar advanced to an almost one-month high on speculation that demand for commodities will rise after U.S. lawmakers reached a budget deal. Coffee, cotton and cocoa also gained, while orange juice fell.
The vote in the House of Representatives broke a yearlong impasse over how to avert $600 billion in tax increases and spending cuts that threatened to send the economy back into recession. The Standard & Poor’s GSCI Spot Index of 24 raw materials jumped as much as 1.6 percent.
Commodities “are going to enjoy a nice bounce after the majority of fiscal-cliff worries are now behind us,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates, said in an e-mail.
Raw sugar for March delivery climbed 0.9 percent to settle at 19.69 cents a pound at 2 p.m. on ICE Futures U.S. in New York, after touching 19.75 cents, the highest for a most-active contract since Dec. 4. Prices tumbled 16 percent last year.
Also on ICE, arabica-coffee futures for March delivery rose 3.9 percent to close at $1.494 a pound, the biggest gain since Sept. 10. Prices dropped 37 percent last year.
Cocoa futures for March delivery advanced 1 percent to close at $2,259 a metric ton in New York, capping the first increase since Dec. 14. Prices rose 6 percent last year.
Cotton futures for March delivery added 0.3 percent to settle at 75.36 cents a pound on ICE. The fiber fell 18 percent in 2012.
Orange-juice futures for March delivery slid 0.6 percent to close at $1.166 a pound in New York. Prices are down 19 percent since reaching a seven-month high on Dec. 19.
Florida “didn’t get cold,” Sterling Smith, a market specialist at Citigroup Inc. in Chicago, said in an e-mail. “The market is taking out most of the frost premium. Also, the good weather in Brazil is helping crops there, adding to the bearishness.”
Brazil is the world’s largest orange grower, followed by Florida.
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