Raw sugar futures on ICE rose to a 5-1/2 month high on Thursday, jumping above a technical resistance level and buoyed by fund short-covering, though producer selling prevented stronger gains. Cocoa prices edged up. March raw sugar settled up 0.17 cent, or 1.1 percent, at 15.26 cents per lb in light volume after rising to 15.28 cents, the highest for the front month since May 26.
A breach above the level of 15.18-15.20 cents attracted some technical buying after the March contract had failed at this range four times in the past two months, traders said. Dealers said the upside momentum continued to be slowed by producer selling while short-covering lifted the market.
"The sugar market currently seems to be torn between still-bearish fundamentals (and an under-hedged group of producers) versus a constructive technical picture (and a still large spec short position)," James Liddiard, of consultancy Agrilion, said in a note. March white sugar settled up $3.10, or 0.8 percent, at $393.90 per tonne.
ICE Futures Europe said 72,200 tonnes of white sugar were tendered against the December contract. March New York cocoa settled up $11, or 0.5 percent, at $2,140 per tonne. Prices were on track to close the week down more than 3 percent after falling from last week's 10-month high of $2,226, and as total open interest fell for the ninth straight session on Nov. 15, ICE data showed.
The market was underpinned by the prospect of a decline in Ivory Coast output, leading to a more balanced global market in 2017/18 after last season's large surplus. "Following a strong crop last season, expectations are that Ivory Coast will see a fall in output this season," ING said in a market note, noting port arrivals in the world's top grower were running below last season's pace.
Olam on Wednesday forecast there would be only a small surplus in 2017/18 after a record surplus of 364,000 tonnes in 2016/17. March London cocoa settled up 6 pounds, or 0.4 percent, at 1,618 pounds per tonne. January robusta coffee settled down $2, or 0.1 percent, at $1,845 per tonne. Dealers said sunny weather in top robusta grower Vietnam enabled harvesting to progress. March arabica coffee settled up 0.05 cent, or 0.04 percent, at $1.3015 per lb.
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