August white sugar closed 90 cents higher at $459.60 a tonne on Wednesday. The market touched a contract high of $465.20 per tonne earlier, buoyed by raw sugar futures which held steady as traders digested a massive 1.3 million tonne delivery against the spot month expiry on Tuesday.
September robusta coffee settled $12 lower at $1,323 per tonne weighed by light origin selling. While September cocoa settled 10 pounds lower at 1,595 pounds a tonne, as worries about demand prospects dragged on the market. Sentiment was bullish in sugar, which hovered within sight of Tuesday's three-year peak as ICE Futures US reported a huge delivery of over 1.3 million tonnes.
Trade sources said they believed the receiver, against the expiry of the ICE July raw sugar contract on Tuesday, was US-based agri-business Cargill, although the company has not commented. ICE October raw sugar futures slipped 0.1 cent to 17.75 cents per lb at 1512 GMT, below Tuesday's three-year peak of 18.09 cents.
"Sentiment is still bullish, but in any bullish market there are periods when price runs ahead of physical demand," said Jonathan Kingsman, managing director of Lausanne-based consultancy Kingsman SA. "And so you may get a correction." Rabobank soft commodity trader Nick Hungate said the delivery echoed Cargill's emergence as the main receiver of the May contract which expired on April 30.
"There was a subsequent strong rally in the market, so that is in the back of people's minds," Hungate said. "Every time we think the market has done enough we get some more bullish fundamental news," Hungate said. "It's a classic sign of a very robust, bull market. It's a market that doesn't let you in cheaply and a market in which flames keep on being fanned with bullish fundamental information.
"So, can it go higher? I think it can. Will it go higher? Who knows? There's no doubt we'll get a lot of volatility because trading conditions are still pretty thin," he said. Kingsman said expectations of a global sugar deficit were driving up sugar futures prices sharply this year.
Brazil's 2009/10 centre-south cane crush reached 142.1 million tonnes by June 15, nearly one third more than the 107.7 million tonnes crushed by this time last year, the Sugar Cane Industry Association (Unica) said Wednesday. Dealers noted the delayed monsoon in India was buoying sugar prices, and referred to concern over the impact of the El Nino weather pattern on the global sugar output outlook.
Comments
Comments are closed.