Wednesday, 18 March 2015 21:05
LONDON: Raw sugar futures edged up on technically driven buying on Wednesday, capped by abundant supply, while arabica coffee steadied above last week’s 13-month low, underpinned by brisk cash demand.
New York cocoa fell for an 11th straight session, trading near Tuesday’s six-week low, pressured by a firm dollar and a weak demand outlook.
Raw sugar futures firmed, with dealers focused on the Brazilian currency after a sharp slide in sweetener prices to a six-year low last week, under pressure from a drop in the real against the dollar.
A weak real boosts incentives for Brazilian producers to lock in local currency returns from dollar-denominated sugar and coffee sales.
Front-month raw sugar traded up 0.06 cent, or 0.5 percent, at 12.88 cents a lb at 1350 GMT, hovering above Friday’s six-year low at 12.57 cents.
“We’re in a holding pattern for now,” said Michael Liddiard of consultancy Agrilion.
“We’re going up and down with the real,” he added. “Crops from origins such as India and Thailand are better than expected.”
Dealers referred to expectations for a big cane harvest in top grower Brazil, starting around April.
“It seems we will continue sideways with a test of 13.00 cents a lb today,” said Thomas Kujawa, co-head of the softs desk at Sucden Financial Sugar.
May white sugar was up $ 1.80, or 0.5 percent, at $ 368.00 a tonne.
Arabica coffee was supported by firm physical demand after futures slid to a 13-month low on Friday, pressured by the fall of the real.
May arabica futures traded down 2.0 cents, or 1.45 percent, at $ 1.3615 per lb, hovering well above Friday’s 13-month low of $ 1.2875.
May robusta coffee was flat at $ 1,778 per tonne.
One European physical trader said robusta futures needed to drift down to around $ 1,700 a tonne to stimulate industry buying.
Second-month robusta coffee hit a 13-month low of $ 1,685 per tonne on Friday, dragged down by the fall in arabicas.
New York May cocoa was down $ 48, or 1.7 percent, at $ 2,740 a tonne, having fallen on Tuesday to $ 2,726, a six-week low.
“A firm dollar is weighing on cocoa, which has been dragged lower with other commodities recently,” a London-based broker said.
May London cocoa was down 25 pounds, or 1.3 percent, at 1,943 pounds a tonne, having touched 1,931 pounds on Tuesday, the lowest since early February.
Copyright Reuters, 2015
