NEW YORK: ICE raw sugar rose more than 3 percent on Wednesday, the most in 2-1/2 months, rebounding from a more than 4-1/2-year low, as short-covering and technical buying more than offset deepening concerns about weak demand and ample supplies.
ICE cocoa gained the most in nearly eight months as it extended a bounce off last week's three-month low.
Arabica coffee fell on low volume. After sinking nearly 2 percent to 13.32 cents per lb, its lowest level since May 2010 and a key long-term support, sugar staged a dramatic comeback as traders raced to cover bearish bets after 10 straight days of losses.
Prices rose 3.4 percent from the previous day, hitting an intraday high of 14.01 cents shortly before the close.
The recovery was notable for its size and volume. In three hours, prices rose more than 5 percent with more than 180,000 lots traded, nearly double the 250-day moving average, Reuters data showed.
The pace of buying accelerated in the last hour of trade as traders scrambled to cover short positions by the deadline of two days after October contract options expiry on Monday.
"We're seeing a lot of short-covering here," said Boyd Cruel, a commodity broker with Vision Financial Markets LLC in Chicago. October raw sugar on ICE Futures US settled up 0.33 cent, or 2.4 percent, at 13.88 cents a lb.
The 13.32 mark marked a midpoint between the May 2010 low of 13 cents a lb and the June 2010 low of 13.82 cents a lb, one trader said.
Investors and traders continued to fret about long-term oversupply and sluggish demand.
Consumers may also be wary of buying October delivery because it is likely to include low-quality Thai sugar, traders said. Liffe December white sugar settled up $2.10, or 0.3 percent, at $417.20 a tonne.
ICE December cocoa futures settled up $83, or 2.7 percent, at $3,153 a tonne, in heavy trading for their largest single-day gain since late January.
Cocoa arrivals at ports in top grower Ivory Coast reached around 1,687,600 tonnes by Aug. 30, a source at cocoa sector regulator CCC said, below exporters' estimates at 1,710,000 tonnes as of Sept. 14.
Liffe cocoa for December delivery settled up 35 pounds, or 1.7 percent, at 2,045 pounds a tonne. ICE December Arabica coffee dropped 0.4 cent, or 0.2 percent, to settle at $1.8485 a lb in low volume trading. Liffe November robusta coffee fell $8, or 0.4 percent, to settle at $1,977 a tonne.
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