Raw sugar futures closed higher on Tuesday, on concerns about tight supplies. US cocoa settled firm in an inside day of heavy volume, pressured by increasing global surplus expectations and lifted by short-covering. Arabica coffee ended higher. Key October raw sugar futures rose 0.20 cent to settle at 30.94 cents per lb.
Contract stopped short of Monday's high at 31.68 cents, a five-month high for the second position. Raw sugar futures climbed in light trade, said dealers. Nick Gentile, head of trading for Atlantic Capital Advisors, said most players away for vacation. Market supported with expectations of a smaller Brazilian cane crop. Trade digesting news about sugar exports from India, especially after news the country would only consider selling the sweetener after September.
"Are they going to officially release it?" Gentile said. September arabica coffee futures rose 2.05 cents to close at $2.4495 per lb. Market felt a lift from the weak US dollar, but the gains were modest as dealers were uncertain as US lawmakers remained deadlocked over raising the nation's debt ceiling to avoid a devastating default, said traders. "No one is really interested in aggressively chasing anything that's going on right now and that's why commodities in general are not moving," according to Sterling Smith, analyst with Country Hedging.
September's 200-day moving average around $2.4786 caused technical resistance, said traders. Indonesia's state weather agency forecast the country's dry season will last longer than normal until November, and the erratic weather reduce coffee exports by a third to 300,000 tonnes. ICE certified arabica stocks fell by 2,575 bags to 1,540,601 bags on July 25, with 12,300 bags pending grading, according to ICE data.
Key September cocoa futures rose $19 to settle at $3,015 a tonne. Market climbed in heavy volume, in an inside session. Short-covering, following Friday's steep fall through long-term moving averages, helped lift the market, said traders. The strong sterling against the US dollar also provided a lift, said traders. Expectations for a large global surplus prevented steeper gains, said traders. The erratic weather in Indonesia may push down the country's cocoa output to 420,000 tonnes, the lowest since 2004.
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