Wednesday, 11 March 2015 20:45
LONDON: Raw sugar futures on ICE steadied after touching a six-year low on Wednesday due to a weak Brazilian currency and expectations of a big Brazilian cane crop, while arabica coffee prices inched toward a 13-month low.
New York cocoa prices fell for the sixth straight session, pressured by a strong dollar. Prices were underpinned by concerns over output in No. 2 grower Ghana.
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Front-month May raw sugar futures were up 0.09 cent, or 0.7 percent, at 13.11 cents a lb at 1237 GMT, after dipping to 12.97 cents, the lowest for the spot contract since April 2009.
Brazilian producers sought to lock in gains from the local currency with sales of dollar-denominated sugar and coffee, while traders said the weak real attracted speculative selling. “The No. 11 (raw sugar) market continues to weaken on the back of the depreciation of the real,” said Tracey Allen, commodities analyst with Rabobank.
“Benign weather in Brazil is also a factor,” she added, referring to expectations of a big cane crop in top grower Brazil.
The cane harvest in centre-south Brazil, the main growing region, is expected to begin in April. May white sugar traded up $ 1.40, or 0.4 percent, at $ 371.80 a tonne.
May arabica coffee futures traded down 1.45 cents, or 1.1 percent, at $ 1.3360 per lb, near a 13-month low of $ 1.288 per lb touched on March 3.
“Trading volumes remain stable as the market looks for direction and on the downside, further selling pressure could now test support towards $ 1.30, while protracted declines could see futures target prices around $ 1.20,” said Kash Kamal, senior research analyst with Sucden Financial.
May robusta coffee traded down $ 14, or 0.8 percent, at $ 1,842 a tonne, under pressure from the stronger dollar.
New York May cocoa was down $ 19, or 0.7 percent, at $ 2,894 a tonne.
May London cocoa was down 13 pounds, or 0.7 percent, at 1,992 pounds a tonne.
“A resumption of upward momentum and subsequent breach of resistance now at the 10-day moving average could see the area around 2,050 pounds targeted,” Kamal said.
Copyright Reuters, 2015
