Monday, 23 March 2015 21:43
LONDON: Raw sugar futures edged up from last week’s six-year low on Monday, boosted partly by a weaker dollar while ample supplies kept a lid on the market.
Arabica coffee futures declined, with the recent run-up stalling as the market waited for more clarity on the outlook for Brazil’s 2015/16 crop. Cocoa futures also fell.
May raw sugar was up 0.02 cent, or 0.2 percent, at 12.70 cents a lb at 1549 GMT. The front month slumped to a six-year low of 12.39 cents on Friday.
Dealers said the sugar market was keeping a close watch on the prospects for the cane crop in Brazil’s centre-south region, with crushing set to begin in April. A slight drop in sugar production is anticipated.
“Although weather remains a risk to C/S Brazil production, the cane crop had 9-1/2 months to develop under normal conditions prior to the onset of drought in Jan,” Morgan Stanley said in a report on Monday.
“With dryness conducive to crushing, weather has had a smaller impact on sugar/ethanol production than previously expected,” the report added.
May white sugar was unchanged at $ 366.50 a tonne.
Arabica coffee futures were lower, with May down 1.90 cents or 1.3 percent at $ 1.4155 per lb.
Dealers said the recent rally, which took prices from a low of $ 1.2875 on March 13 to a peak of $ 1.4675 on March 19, appeared to have at least temporarily run out of steam.
They noted much could hinge on the size of Brazil’s 2015/16 crop, forecasts for which are expected to start narrowing in the next few weeks.
“There is so much confusion about production numbers at the moment,” said Andrea Thompson, an analyst at CoffeeNetwork, part of INTL FC Stone.
Thompson said she was forecasting Brazil’s crop at 40 million 60-kg bags, adding the size of the crop would determine whether there was a significant global deficit for the season or possibly even a small surplus.
May robusta coffee futures were up $ 14 or 0.8 percent at $ 1,834 a tonne, boosted partly by concerns about dry weather in Vietnam.
Cocoa futures fell back after a sharp rally on Friday weighed partly by improving prospects for the mid-crop in top grower Ivory Coast.
May New York cocoa was down $ 25 or 0.9 percent at $ 2,765 a tonne. May London cocoa fell 18 pounds or 0.9 percent to 1,927 pounds a tonne.
Copyright Reuters, 2015
