August white sugar closed $4.30 higher at $458.70 a tonne on Tuesday after the market touched a contract high of $463.50 per tonne earlier, buoyed by a sharp run-up in ICE raw sugar which rose to a three-year peak ahead of Tuesday's expiry of the July contract. September robusta coffee settled $11 higher at $1,335 per tonne, as it continued to edge up from last week's decline to contract lows.
September cocoa settled 15 pounds lower at 1,605 pounds a tonne, as the firm pound weighed on the market. Raw sugar futures fell on a firmer dollar on Tuesday, having hit a three-year peak, as traders focused on expectations of an all-time high delivery of over one million tonnes against expiry of the spot contract.
Robusta coffee edged up in a recovery from oversold positions, and cocoa futures fell, pressured by the stronger dollar, dealers said. Sugar reversed early gains to a three-year peak as the dollar strengthened after a report showed a higher-than-expected drop in US consumer confidence in June. Earlier, investment funds, investors and trade houses piled into sugar, driving benchmark October raw sugar futures to a new three-year high of 18.09 cents per lb.
"There was fund buying from the beginning (today)," one sugar futures trader said. "The market is crying out for a correction lower." The trade is expecting a huge delivery against expiry of the ICE July contract on Tuesday, with traders predicting a delivery tonnage of between 1.0-1.3 million tonnes.
"With most traders expecting the delivery to be in excess of 1.0 million tonnes, a new record delivery, no doubt most interest will be focused over the next couple of months on where all of this sugar will ultimately be shipped," Sucden Financial said in a daily market report. Traders said they expected Cargill to receive a large chunk of the tonnage, adding that the merchant could have homes for the sugar in Asia, perhaps in India, the world's largest consumer of the sweetener.
India has swung to net importer from exporter this year after a dismal local harvest. ICE October raw sugar futures lost ground from the three-year peak of 18.09 cents per lb to stand at 17.67 cents per lb, down 0.23 cent, at 1506 GMT, as the dollar strengthened against the euro. "The market seems to be gaining a few friends, especially after some of the recent wash-outs (declines) we've had.
And taking into account that some (investment fund) systems have gone a bit short on the decline of the price, it could be in a recovery phase," a coffee trader said. Vietnamese domestic coffee prices at their lowest in 27 months saw export quotations also near three-year lows and sellers holding back their slimming stocks, traders said.
Comments
Comments are closed.