Raw sugar futures rallied to end near a two-week peak on Tuesday as fears the cane crop in No 1 producer Brazil will shrink further stoked a rally. Coffee declined and cocoa closed barely higher, as both markets came under early pressure from renewed worries over the eurozone debt crisis and a firm dollar. October sugar soared 1.57 cents, or 5.43 percent, to end at 30.49 cents per lb, its highest settlement in almost two weeks and having hit a new contract top of 30.60 cents.
It was the highest intraday level for spot sugar since June 30, when it hit 30.88 cents. The sweetener jumped as trade increasingly worried Brazil's center-south cane crop would see further cuts. Brazil's Unica group releases a new crop update on Wednesday. Country Hedging Inc analyst Sterling Smith said market players feel Brazil crop is "shrinking faster" than thought. Market also inspired by surge in London white sugar futures to record territory.
September arabica coffee futures fell 1.20 cents to finish at $2.5785 per lb. Market pressured by firm dollar and news of fresh worries over eurozone debt. Smith said coffee dipped as supply concerns appear to have eased. More supplies from Central America and No 1 producer Brazil seen in the market, said brokers. Forecaster Telvent DTN said Brazil's long-range guidance shows no threat of cold weather to its coffee areas. Key September cocoa futures edged up $1 to settle at $3,051 per tonne.
Early investor sales led to probe of area near $3,000, said brokers. Late short-covering enabled bean values to erase losses as market finished near unchanged. Smith said a move toward the $2,900 area in US cocoa's key September contract would not be surprising because recent advance seemed overdone. Market looking toward release of grind data later in the week.
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