White sugar futures on Liffe rose to their highest level in nearly three months on Wednesday, buoyed by delays to shipments from top producer Brazil, while cocoa slipped from the prior session's five-month peak due to origin selling. Robusta coffee futures on Liffe posted losses. ICE soft commodity markets were shut on Wednesday for the US Independence Day holiday and will reopen on Thursday.
August white sugar closed $7.10 or 1.1 percent higher at $639.80 per tonne at 1630 GMT after touching $640.40, the highest level for the front month since April 10. Dealers said delays to Brazil sugar shipments, which were initially caused by heavy rains, had combined with overall strength in commodity markets to spark a rise in prices of nearly 9 percent in the past week.
Waiting times at Brazilian ports, which have shortened thanks to drier weather, are likely to increase again in the coming weeks as the harvest gathers pace, a shipping agency director said. "The backlog will not clear up this month, maybe in August or September," said Emmanuel Jayet, head of sugar research at Paris-based Sucden, adding the delays had helped to support prices.
Top grower Brazil's sugar exports fell by nearly a third in June to 1.29 million tonnes from 1.85 million a year earlier. "It is two things at once. We've rains in Brazil and on top of that we've got a very strong risk-on rally," VTB Capital analyst Andrey Kryuchenkov said.
Rains were also disrupting shipments from Australia, helping to further tighten nearby supplies. Australia's raw sugar exports are likely also to be delayed as wet weather slows the harvest of sugar cane, even though most of the crushing operations that were disrupted last week by rain have resumed, refining firms said. Sugar has also benefited from a broad-based advance in commodity markets in recent days. The 19-commodity Thomson Reuters-Jefferies CRB index gained a total of 7.7 percent from Friday to Tuesday, the third-largest three-day gain on record.
Cocoa futures on Liffe slipped back slightly from the prior session's five-month peak. London September cocoa settled 12 pounds lower, or 0.7 percent, at 1,586 pounds ($2,500) per tonne. The contract rose to a peak of 1,606 pounds on Tuesday, the highest level for the benchmark second month since late January.
"We're run into resistance from origin selling and that has put the brakes on. Ghana has been in the market; these are attractive levels for them," one London dealer said. Dealers said the run-up had largely been fuelled by the overall strength of commodity markets during the last few days. Robusta coffee futures on Liffe were also lower, with September down $38 or 1.8 percent, at $2,098 a tonne.
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