Liffe sugar hits record high

Liffe August white sugar ended up $39.10 at $857.00 a tonne on Tuesday after setting a record high for the front month of $858.30 in late trade. Market buoyed by fund buying against the backdrop of short-term supply tightness following downward revisions to the crop outlook in top producer Brazil.
Liffe September robusta coffee ended $63 lower at $2,291 a tonne. Supply tightness in the coffee market appears to be easing while the threat of frost in Brazil is also receding. Liffe September cocoa ended 3 pounds higher at 1,936 pounds a tonne. Market consolidating after sharp setback late last week. Focus turning to second quarter European grind data due for release in the next few days. "The resurfacing of euro area sovereign debt risk concerns, macro-worries and a stronger dollar weighed on the complex," Barclays Capital said in a daily note.
Investors dumped the euro and stocks for a third day on Tuesday as concern mounted that the eurozone debt crisis was spreading to Italy and Spain, while US bond prices rose. Sugar futures reversed early losses, surging more than 4 percent higher, as fund buying helped October raw sugar break above 30 cents a lb, dealers said. "Funds are long of the market and new contract highs have bought more buying in," a London-based broker said.
Consecutive downward revisions to forecasts for top producer Brazil's sugar output supported the market, as dealers awaited an update from the country's cane industry group due on Wednesday.
"In recent months, more sceptical assessments, in particular on Brazilian production, which started with delays and is delivering unsatisfactory sugar content, have pushed up prices," Commerzbank said in a daily commodities note. The latest to cut its Brazil cane outlook was sugar merchant Czarnikow, which lopped 40 million tonnes off its estimate for cane output last week, to 535 million tonnes, less than last year's 557 million. However, anticipation of further downward revisions is underpinning prices, dealers said. "The market is trading off a sub-530 million figure," James Kirkup, head of sugar brokerage at ABN Amro Markets (UK) Ltd said.