Thursday, 26 March 2015 20:28
LONDON: Raw sugar futures on ICE steadied on Thursday near the prior session’s six-year low, pressured by abundant supplies and light physical demand, while arabica coffee was flat.
Cocoa was little changed, with a stronger pound underpinning New York futures.
Raw sugar eased, weighed by ample supplies with traders tracking the pace of Chinese buying of out-of-quota sugar.
“There is disappointment that Chinese import licenses are being approved slowly,” said Robin Shaw, analyst with broker Marex Spectron.
He spoke of high sugar output in growing countries, such as India and Thailand, and abundant stocks.
“If we’re heading for a deficit next year, it will be a small one,” he said. “No one can sustain a bullish argument, and anyone who goes long regrets it.”
May raw sugar futures were down 0.09 cent, or 0.7 percent, at 12.43 cents a lb at 1226 GMT, after slipping to a six-year low of 12.31 cents on Wednesday.
A weak Brazilian currency weighed on sugar futures, as Brazilian producers sold dollar-denominated sweetener to lock in local currency returns.
May white sugar futures were down 70 cents, or 0.2 percent, at $ 363.80 a tonne.
Arabica coffee on ICE steadied after jumping nearly 4 percent on Wednesday, buoyed by a forecast for falling supplies in top grower Brazil.
Benchmark May futures were down 0.5 cents, or 0.4 percent, at $ 1.3945 per lb.
“Short-term indicators suggest the potential for modest gains towards the 40-day moving average of $ 1.4896 and the $ 1.50 area,” said Myrto Sokou, senior research analyst with Sucden Financial.
Traders viewed the latest coffee forecast for top grower Brazil, from INTL FCStone, as bullish, although many were skeptical about the robusta estimate which they viewed as too low.
INTL FCStone forecast in a report on Wednesday that Brazil will harvest close to 44 million to 45.5 million 60-kg bags, down from 48 million to 49 million bags. It pegged arabica output around 32.5 million to 33.5 million bags and robusta around 11.5 million to 12 million bags.
An unprecedented drought reduced coffee production last year in Brazil, the world’s biggest grower, and stunted tree branch growth for the upcoming 2015/16 crop.
May robusta coffee was up $ 2, or 0.1 percent, at $ 1,818 a tonne.
Cocoa was steady with New York May flat at $ 2,786 a tonne, while London May cocoa fell 4 pounds or 0.2 percent to 1,947 pounds a tonne.
“Currency is a driver for New York futures,” a London-based cocoa broker said, referring to the pound’s rise to a one-week peak against the dollar after British retail sales data beat expectations.
Copyright Reuters, 2015
