Arabica coffee and cocoa futures soared Wednesday after US Federal Reserve Chairman Ben Bernanke raised the possibility of further stimulus to stabilise a faltering US economy. But raw sugar, which had also rallied during the session, finished lower after sugar industry group Unica did not cut the cane crop of No 1 grower Brazil as much as had initially been feared.
Some in the trade had thought Unica would reduce the cane crush in Brazil below 530 million tonnes, but the figure came in at 533.5 million tonnes. October fell 0.25 cent to close at 30.24 cents per lb, having hit a new contract top of 31.33 cents. It was highest intra-day level for spot sugar since late February, according to Thomson Reuters data.
Sweetener rallied after remarks by Bernanke, said dealers. But the Unica figures triggered late selling pressure by investors, added dealers said. Country Hedging Inc analyst Sterling Smith said sugar still has "bullish underpinnings" that supported the advance. Traders said aside from Brazil, market closely watching export plans by India.
Market also inspired by surge in London white sugar futures to record territory. September arabica coffee futures rose 6.10 cents or 2.37 percent to finish at $2.6395 per lb. Bernanke factor inspired advance along with oversold conditions - analysts.
Early weakness in coffee stemming from euro debt woes erased by US Fed chairman's views and collapse in the dollar. Some end-user buying seen in coffee as consumers take cover because near-term low may be in place. Key September cocoa futures shot up $119 or nearly 4 percent to settle at $3,170 per tonne. Market weak early as spillover pressure from eurozone debt crisis deflated bean values. But Bernanke news reversed sentiment as it did in the rest of the complex. The market jumped, hit automatic buy order stops, said dealers. Market fundamentals seen though as bearish given ample supplies. Traders said market looking toward release of grind data from Europe and North America tomorrow. North American bean grindings seen up 2-5 percent.
Comments
Comments are closed.