Liffe March white sugar ended $7.30 higher at $681.00 per tonne on Tuesday. Market rebounded after testing support towards the bottom of the recent range. Prices underpinned by tight export availability from top producer Brazil. Liffe January robusta coffee ended $5 higher at $1,853 per tonne with prices also recovering from early weakness linked to the strength of the dollar.
Main focus remains the harvest in top robusta producer Vietnam which should start to gather pace in the next few days. Liffe March cocoa ended 9 pounds lower at 1,860 pounds a tonne. Market weighed by hedge selling as main crop cocoa flows out of West Africa. Outside markets were key drivers of soft commodity futures, dealers said.
"The macro picture seems very headline-driven at the moment and scary for us in sugar intra-day," said Thomas Kujawa of broker Sucden Financial. Sugar markets, meanwhile, are underpinned by tight export availability from top producer Brazil. "The sugar background fundamentals are supportive, but sugar is susceptible to outside markets," said James Kirkup, head of sugar brokerage at ABN Amro Markets (UK) Ltd.
"If outside markets take another lurch, then sugar would go along with it. People are nervous about committing too much to risky markets, volumes are low and there is Thanksgiving on Thursday." Traders and investors typically try to reduce their exposure to risk going into a long weekend. "We've seen light hedging and light long liquidation," a London-based cocoa futures dealer said.
Dealers said a major short-term focus was the forthcoming presidential run-off election in top cocoa producer Ivory Coast. Many fear street violence if the result is disputed, potentially disrupting the flow of cocoa to ports. Rains falling in Vietnam's Central Highlands coffee belt in the past week are forecast to end early next week, a state-run newspaper said, enabling coffee cherries to ripen before the harvest starts in earnest in about 10 days.
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