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NEW YORK/LONDON: Raw sugar futures rose to a 9-1/2-month high on Wednesday, breaking through key resistance levels, as sugar output from top grower Brazil declined, while cocoa and coffee prices fell.
SUGAR
March raw sugar settled up 0.2 cent, or 1.5 percent, at 14.01 cents per lb., after rising to 14.24 cents, its highest since January.
Prices broke out above a double top pattern, after having peaked twice in recent sessions at 13.95 cents. The break out of that pattern, and the break above psychological resistance at 14 cents, were bullish signals, dealers said.
Reduced sugar output from top-grower Brazil and an early end to the harvest there have boosted sentiment and supported prices, dealers said.
Sugar output from Brazil’s main producing region fell 43 percent in the first half of October as rains delayed cane processing and mills continued to favor ethanol production over sugar, cane industry group Unica said.
“With fewer mills expected to begin harvesting in Q1 2019 … this would mean a long intercrop period where Indian and Thai sugar exports would be expected to fill the gap,” Nick Penney, senior trader at Sucden Financial, said in an update.
Dealers were closely watching the upcoming Brazilian presidential elections, set for Sunday, the results of which are expected to influence the country’s currency.
December white sugar settled up $7.20, or 1.9 percent, at $387.70 per tonne.
India’s state-run trading company MMTC Ltd issued an international tender to overseas buyers to sell and export 50,000 tonnes of Indian white crystal sugar.
COFFEE
December arabica coffee settled down 0.85 cent, or 0.7 percent, at $1.2025 per lb., after trading in positive territory for much of the session.
Still, the contract’s close above the 200-day moving average for the second straight session was a bullish sign, dealers said.
Open interest in coffee rose slightly, increasing by 128 lots to 286,095 lots on Tuesday, the first increase in 18 sessions, ICE data show.
January robusta coffee settled down $2, or 0.1 percent, at $1,717 per tonne.
Uganda’s coffee shipments last month were down 14.2 percent compared with September last year, the sector regulator said.
COCOA
December New York cocoa settled down $50, or 2.3 percent, at $2,137 per tonne.
December London cocoa settled down 13 pounds, or 0.8 percent, at 1,616 pounds a tonne, after touching 1,658, its highest since late August.
Expectations of a bountiful crop from main growing region West Africa continue to pressure prices, dealers said.
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Source: Brecorder
