NEW YORK/LONDON: Raw sugar futures jumped on Thursday after Indian authorities deferred a decision on output incentives, while Liffe cocoa inched up to a 2-1/2-year high with a boost from the weak sterling versus the dollar.
Arabica coffee on ICE Futures U.S. jumped more than 2 percent in heavy volume, helped by March/May spreading while concerns about dry weather in top grower Brazil provided support.
New trading hours for ICE softs will be implemented on Monday.
ICE March raw sugar closed up 0.25 cent, or 1.7 percent, at 14.99 cents a lb. Traders said the rise, which failed to lift the market out of this week's range and kept it near Tuesday's 3-1/2-year low at 14.70 cents, was in reaction to the Indian government putting off a decision on providing financial assistance to mills for raw sugar production.
This has reduced the amount of raw sugar expected to be exported from India, the world's second-biggest grower after Brazil, to the world market.
Total raw sugar futures open interest jumped by nearly 10,000 lots to 850,025 lots on Wednesday, the highest since Sept. 19, ICE data showed, as the market fell toward a 3-1/2-year low.
"Despite everything that has been promised, the Indian milling sector doesn't seem to have got the support it asked for," said Toby Cohen, director of commodities house Czarnikow.
"Sugar milling (in India) remains unprofitable".
Tom Kujawa, co-head of the softs department at Sucden Financial Sugar, said: "We expect producer sales above 15 cents, and there might be some light stops around 15.10 cents."
March white sugar futures on Liffe ended up $6.20, or 1.5 percent, at $409.30 per tonne.
COCOA MOVES ON UP
May cocoa on Liffe settled up $8, or 0.4 percent, at 1,839 pounds a tonne, after hitting 1,842 pounds, the highest since September 2011, supported by the weak sterling versus the U.S. dollar and strong chart-based buy signals.
Both the London and New York cocoa markets have rallied more than 7 percent in the past week on supply concerns and technical strength. They soared above key moving averages and breached a long-term 50 percent Fibonacci retracement level.
March cocoa on ICE finished down $6, or 0.2 percent, at $2,912 a tonne as traders reduced long positions before the end of the month and the weak sterling weighed. It remained near its 2-1/2-year peak of $2,933 reached on Tuesday.
Total ICE cocoa futures open interest climbed for the third straight session on Wednesday, by 2,807 lots to 221,662 lots, the highest since Nov. 6, exchange data showed.
In coffee, March arabica coffee settled up 2.90 cents, or 2.5 percent, at $1.20 per lb, rallying for the third straight day to the highest since Jan. 13, on concern among speculators about dry weather in Brazil. Some fundamental traders, however, said it was too early to start worrying.
"We expect arabica prices to continue to stabilize and to trade at around $1.20 a lb in the forthcoming months," ABN AMRO said in its latest quarterly commodity report.
"For 2014, we expect prices to increase at a moderate pace, which should result in an average price of $1.25 a lb."
Liffe March robusta coffee rose $30, or 1.7 percent, to settle at $1,774 a tonne.
"Traditionally, half of the crop is sold before Tet, or Chinese New Year," ABN AMRO said.
"So with a larger proportion of the crop selling delayed, robusta prices are arguably trading higher as a result."
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