Liffe front-month, December white sugar ended $3.40 higher at $701.10 per tonne on Wednesday after hitting an 8-month high for the front month of $708.60 a tonne. Market supported by tight supplies, Brazil port congestion and a soft dollar.
Liffe second-month March cocoa ended 2 pounds lower at 1,934 pounds a tonne. Market underpinned by talk of black pod disease in West Africa while third quarter grind data, to be released on Thursday, keenly awaited for any sign that the adverse economic climate in the US and Europe may be weighing on demand.
Liffe second-month January robusta coffee ended $8 lower at $1,679 per tonne. An expected large crop in Vietnam weighed on prices. "The sugar price is certainly high and it's to do with the dollar and Brazil crop being smaller than expected," Andrey Kryuchenkov of VTB Capital said.
Analysts have reduced estimates for the centre-south crop, which accounts for about 90 percent of Brazil's cane output. Brazil accounts for about half the world's sugar trade. Dealers said ICE front-month raw sugar futures appeared poised to test the psychological 30 cents a lb area soon.
"The rally from 20 to 28 cents (in recent months) has been more about supply than demand," said James Kirkup, director and head of sugar brokerage at ABN Amro Markets (UK) Ltd. The Reuters-Jefferies CRB index, a global barometer for commodities, shot above a key psychological mark for the first time in two years on Wednesday as a weakening dollar bolstered prices.
European and North American third-quarter 2010 cocoa grindings are expected to show a return to lower rates of growth, which should continue into 2011 as a sluggish economic outlook caps demand. "You will probably see more activity after the grind figures are out," a London-based broker said, adding that both markets are looking overbought.
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