Sugar Futures Rally on Brazil Crop Concerns; Cotton, Cocoa Gain

Sugar gained the most in two months as rain threatens crops in Brazil, the world’s biggest producer. Cotton capped the longest rally in six months. Cocoa and orange juice rose, while coffee was unchanged.

Rainfall that halted fieldwork in the past few days will probably disrupt harvesting this week and reduce productivity in Brazil’s Center South, the main cane-growing area, forecaster Somar Meteorologia said in a report. Sugar output in the region will be 33.7 million metric tons in the 12 months started in April, Usina Alta Mogiana SA, a Sao Joaquim da Barra-based refiner, said in a report e-mailed Sept. 27. That’s down from a June forecast of 34.2 million.

“The rain delays are supporting prices because that probably is going to reduce yields,” George Kopp, a senior market analyst at International Futures Group in Greenville, South Carolina, said in a telephone interview.

Raw sugar for March delivery jumped 2.3 percent to settle at 18.14 cents a pound at 2 p.m. on ICE Futures U.S. in New York, the biggest advance for a most-active contract since July 29. The sweetener increased 7.2 percent this quarter, the most since December 2010.

Also in New York, cotton futures for December delivery rose 0.7 percent to 87.21 cents a pound. Prices posted the fifth straight gain, the longest rally since March.

Above-average rains in China, India and the U.S. have hampered crops in the world’s top producers, O.A. Cleveland, an agricultural economics professor at Mississippi State University in Starkville, said in an e-mailed report. Still, “demand disappears above 90 cents and will limit any price advance,” he said.

Cocoa futures for December delivery gained less than 0.1 percent to $2,640 a ton on ICE. The commodity surged 22 percent this quarter, the most since the period ended September 2009.

Orange-juice futures for November delivery added 1.5 percent to $1.313 a pound.

Arabica-coffee futures for December delivery were unchanged at $1.137 a pound. This quarter, the price slid 5.6 percent, the fourth consecutive drop.

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