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ICE sugar bounces after sell-off, London cocoa at 5-week top

ICE sugar bounces after sell-off, London cocoa at 5-week topNEW YORK/LONDON: Raw sugar futures on ICE consolidated higher on Thursday after the prior session’s steep selloff from a nine-month high while a sharply lower British pound helped lift London cocoa to a five-week high.

Arabica coffee rose in see-saw dealings, remaining well within a two-week range as the market awaited new fundamentals.

ICE benchmark raw sugar settled up 0.12 cent, or 0.8 percent, at 14.76 cents per lb, after rallying 2.8 percent above 15 cents.

“The bulls are trying to bring it back up again but a lot of people are still licking their wounds from yesterday,” said David Martin, founder and managing member of Martin Fund Management LLC in New York.

Sugar prices have been highly volatile this week, having rallied nearly 7 percent in two days to a nine-month high and then surprising the market by giving back all of these gains on Wednesday.

The funds were buying while producers sold into the market as “they’re getting prices they didn’t think they could get five to six weeks ago,” Martin said.

The International Sugar Organization raised its 2015-16 global sugar deficit forecast.

“If the market can hold around these levels for two or three days, there is no reason not to move a little higher,” Agrilion consultancy’s Michael Liddiard said.

Raw sugar options continued to see unusually heavy volumes with particular interest in puts at values ranging from 12 to 14.5 cents.

March white sugar settled up $ 1.5, or 0.4 percent, at $ 400.90 per tonne.

In cocoa, prices rebounded from Wednesday’s drop with the London market leading the way on support from currency.

London March futures settled up 37 pounds, or 1.7 percent, at 2,213 pounds per tonne, after rising to the highest since Sept. 28 at 2,217.

New York March cocoa settled up $ 26, or 0.8 percent, at $ 3,270 per tonne, below Tuesday’s five-week high of $ 3,302.

Robusta coffee futures were little changed, with holders of the previous Vietnamese crop more likely to sell stocks after a rally, while arabica coffee steadied.

January robusta futures settled down $ 1, or 0.06 percent, at $ 1,669 per tonne, while December arabica futures settled up 0.4 cent, or 0.3 percent, at $ 1.209 per lb.

Copyright Reuters, 2015

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