Coffee and cocoa futures climbed as positive economic sentiment spilled into the commodity complex on Tuesday. Raw sugar settled up a shade after bucking the day's trend and trading lower for much of the day, while the whites finished down.
"It looks like some of the fears of the double dip (recession) have been alleviated in the short-run and I think that's why you're seeing these commodities rallying," said Adam Klopfenstein, senior market strategist at MF Global Ltd's Lind-Waldock division in Chicago.
"A large number of shorts today and in past days have been compelled to roll with losses from the July contract into September and December. The longs know that the shorts cannot deliver physical cocoa," said a German trader. September cocoa on ICE gained $56 or 1.9 percent to finish at $3,045 per tonne, in light dealings buoyed by positive economic sentiment and the firm pound against the US dollar. Arabica coffee futures on ICE climbed, sitting at the top of the Reuters-Jefferies CRB index, made up of 19 commodities. Arabica coffee futures for September jumped 2.10 cents or 1.3 percent to close at $1.6565 a lb. Dealers said it was possible it would remain wide as long as New York arabica prices held up at current levels.
Thailand bought 74,350 tonnes of Thai white sugar from international trading firms at $705 to $720 a tonne in a tender to fill a shortage in the domestic market. Raw sugar futures dawdled in a thin, choppy session as most the action was conducted by technical players. ICE October raw sugar added 0.07 cent to finish at 17.17 cents per lb.
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