May white sugar closed up $0.10 at $521.5 per tonne on Wednesday. Dealers focused on signs of a revival in physical offtake after a recent slide to six-month lows. May cocoa on Liffe ended 17 pounds higher at 2,200 pounds a tonne. Dealers talked of expectations of good-sized mid crop harvests in leading West African producers from April.
May robusta coffee settled $17 higher at $1,248 per tonne. Dealers talked of ample supplies from top producer Vietnam. In early trade, raw sugar futures on ICE slid more than 2 percent on Wednesday to an 8-month low and whites dropped to a 6-month trough on investor liquidation, discouraged by a lack of consumer buying.
"It's across-the-board liquidation," said Nick Hungate, executive director of Rabobank. A European analyst close to the fund community, who asked not to be identified, said: "Some sell stops have been reached. Some funds are decreasing their long positions. Physically, sugar is not finding homes." ICE raw sugar futures have plunged 42 percent since their 29-year peak of 30.4 cents a lb on February 1 - just six weeks ago.
Dealers said many physical buyers had remained sidelined as prices tumbled. One analyst said mills in top producer Brazil would eventually switch out of sugar output into ethanol, which could help create a floor in sugar prices as availability of the sweetener tightened.
But for now, market psychology was extremely nervous as prices fell below a psychological 18 cent support level, oblivious to a weaker dollar which is supportive for dollar-denominated commodities such as sugar. "Physical buyers are not sizeable enough to stem the tide," Hungate said.
Dealers said the sugar market seemed to be taking the view that the global sugar deficit was easing, faced with a likely bumper centre-south Brazil harvest starting in April, and prospects for a good monsoon in number 2 producer India. A European broker, in a daily market report, noted rising concerns over drought in China's sugar-producing belt in Guangxi, but this did not have any market impact.
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