Liffe front-month, December white sugar ended $24.20 higher at $649.80 per tonne on Thursday after earlier setting a 7-month high for the front month of $661.80 a tonne. Market buoyed by a fresh wave of fund buying and crop concerns in South Africa, Argentina, Mexico and Australia.
Liffe second-month March cocoa ended 7 pounds lower at 1,862 pounds a tonne. A rise in sterling versus the dollar weighed on prices while hedge selling is also seen picking up as main crop cocoa starts to flow out of West Africa. Liffe second-month January robusta coffee ended $4 lower at $1,653 per tonne. Volume dominated by rolling forward of positions out of November into January.
"The common denominator is a weak dollar, with most of the commodities complex up," said James Kirkup, director and head of sugar brokerage at ABN Amro Markets (UK) Ltd. Thomas Kujawa of Sucden Financial Sugar said, "Overall, we seem more driven by the macro flows (macroeconomic picture) and the weak dollar which have been supportive to sugar."
Sugar futures prices were also supported by concerns over adverse weather in producers such as South Africa, Argentina, Mexico and Australia. "This is probably spec and industry buying," one London-based sugar futures broker said of the rally. "I think we had a phase of fund liquidation. Now that seems to have passed. The overall consensus is we could see some price improvement after starting the week poorly," one London dealer said, adding some expected a rebound back to around $1,700.
Dealers said volume was dominated by rolling forward of positions from November into January with the front month at a discount of about $29 to $30. There was some talk of a slow start to the harvest in top robusta producer Vietnam although it did not appear to be currently having much impact on prices. "There obviously isn't that much concern when you see November-January trading at $29 to $30 under," one dealer said, adding if there was any sign of nearby supply tightness then the front month's discount should begin to narrow.
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