Raw sugar soars

Raw sugar futures on ICE rose 2 percent on Thursday, buoyed by the firm Brazilian currency and demand for nearby supplies that boosted the spot contract's premium, while cocoa extended gains to a three-week high. Arabica coffee rallied on short-covering and support from the strong real currency in Brazil, the world's biggest coffee grower. Robusta futures jumped to a one-month high as output forecasts in Brazil fell due to dry weather.
In raw sugar, the March/May spread traded as high as a 0.19 cent premium, the highest since November 2013, reflecting tight supplies in the inter-crop period in No 1 producer Brazil. The March contract will expire on February 27. ICE March raw sugar futures settled up 0.33 cent, or 2.2 percent, at 15.04 cents a lb, after rising to a two-week high in late dealings at 15.05 cents.
In the white sugar market, a small delivery is expected against the March contract's expiry on Friday, traders said. They said it was likely to be below 200,000 tonnes and include Central American origin sugar. London March white sugar futures rose $6.40, or 1.7 percent, to $383.40 per tonne. New York cocoa futures rose for the eighth straight session, bouncing up from a one-year low, on concerns about mid-crop output in the world's top two producers Ivory Coast and Ghana.
"It just overshot on the downside, $3,000 is probably closer to fair value," said James Cordier, head trader at Liberty Trading Group in Florida. Most-active May New York cocoa on ICE closed up $35, or 1.2 percent, at $2,919 a tonne, having earlier hit a three-week high of $2,922 a tonne. May London cocoa futures ended up 6 pounds, or 0.3 percent, at 1,987 pounds a tonne.
Arabica coffee jumped, with the most-active May arabica futures ending up 5.15 cents, or 3.2 percent, at $1.6745 per lb. Dealers said some sellers of March put options, which expired on Wednesday, had to cover their short positions on the futures market. May robusta coffee finished up $46, or 2.3 percent, at $2,020 a tonne. Brazil's 2015/16 coffee crop is due to drop 2.7 percent from the drought-decimated 2014 harvest to 43.9 million bags, but the problem this year is not with the export-oriented arabica trees but the home-brewed robusta crop, the IBGE statistics institute said.