Cocoa and sugar climb

Cocoa and sugar futures moved higher on Thursday, in line with firm commodity markets, as hopes rose that the United States would avert a fiscal crisis, while coffee pared earlier gains. A benchmark world stock index rallied to a three-week high and the euro gained earlier in the day on optimism that US political leaders were moving toward a deal to avoid a fiscal crisis that could derail growth in the world's biggest economy.
"We have been trading in line with the macroeconomic headlines lately," said Andrey Kryuchenkov, an analyst at VTB Capital. Cocoa futures on ICE Futures US were higher, with March closing up $33, or 1.3 percent, at $2,491 a tonne. Dealers said both the London and New York markets remained range-bound, without clear technical or fundamental direction, trendless since December 2011.
Benchmark Liffe March cocoa futures settled up 14 pounds, or 0.9 percent, at 1,585 pounds per tonne. "Support is toward 1,550 pounds, resistance is toward 1,600 pounds, so the range is narrowing, but there's still no sign of a concerted breakout," said a British-based broker.
The March raw sugar futures contract on ICE settled up 0.18 cent, or 0.9 percent, at 19.34 cents a lb. "With the macro picture improving as a result of increasing optimism in the US that political parties are attempting to compromise ahead of the fiscal cliff, stocks and other commodities held their ground or improved," said Nick Penney of brokerage Sucden Financial.
The market did not react to a Reuters report that Mexico's agriculture minister said the country has begun bankruptcy proceedings for nine state-held sugar mills producing about a fifth of the country's sugar and intends to sell them. March white sugar on Liffe rose $3.70, or 0.7 percent, to finish at $513.30 per tonne. Benchmark March arabica coffee futures climbed 1.55 cents, or 1 percent, to settle at $1.5640 per lb. The contract slumped to $1.4710 on Wednesday, the lowest level for the benchmark second month since June 2010, before a short-covering rally trimmed losses.
The discount of the December contract, which is in its delivery period, continued to grow, closing at 10.25 cents per lb, the biggest since February 1986. It has extended beyond the cost of carrying it to the next delivery period in March, which dealers say is roughly 9 cents per lb. January robusta coffee futures inched up $3, or 0.2 percent, to close at $1,938 a tonne.