Sugar Futures Decline to Five-Week Low on Ample SuppliesOliver Renick and Marvin G. Perez
Sugar futures fell to a five-week low on signs that cane farmers in Brazil, the world’s largest producer, will harvest a bumper crop and add to a global surplus. Orange juice also dropped, while cotton, coffee and cocoa gained.
In the season starting next month, production in Brazil’s Center South, the top growing region, may exceed last year’s record, according to a Bloomberg survey. Sporadic rain will allow fieldwork to proceed in some areas this week, Sao Paulo-based Somar Meteorologia said yesterday.
“Fundamentals are still bearish” in the medium to long term, Sucden Financial said yesterday in its Daily Sugar Report. “As usual, the market is very sensitive to weather.”
Raw sugar for May delivery fell 1.1 percent to settle at 17.78 cents a pound at 2 p.m. on ICE Futures U.S. in New York, after touching 17.77 cents, the lowest for a most-active contract since Feb. 15.
Orange-juice futures for May delivery slid 0.3 percent to $1.3895 a pound on ICE.
Cotton futures for May delivery rose 1.7 percent to 88.04 cents a pound in New York, snapping a four-session slump, the longest since September.
China, the biggest consumer and importer of the fiber, will continue to build reserves next year, Xinhua News Agency said, citing the National Development & Reform Commission. On March 28, the U.S. Department of Agriculture will release its first survey-based forecast for 2013 domestic plantings. The U.S. is the world’s largest exporter.
“Besides the Chinese announcement providing some support, nobody wants to be caught short in case of any big surprises” from the USDA data, Sterling Smith, a futures specialist at Citigroup Inc. said in a telephone interview from Chicago.
Arabica-coffee futures for May delivery climbed 1.5 percent to $1.376 a pound on ICE, the fifth straight increase and the longest rally since September 2011.
Cocoa futures for May delivery gained 0.8 percent to $2,146 a metric ton in New York.