Raw sugar recovers from six-week low as oil prices rise
- October raw sugar was up 0.2 cents, or 2%, to 11.55 cents per lb at 1151 GMT, after sliding to a low of 11.27 cents on Tuesday.
- September New York cocoa rose $11, or 0.5%, to $2,166 a tonne.
LONDON: Raw sugar futures on ICE rose on Wednesday, recovering from the previous session's six week low as crude oil and global equities headed higher.
SUGAR
October raw sugar was up 0.2 cents, or 2%, to 11.55 cents per lb at 1151 GMT, after sliding to a low of 11.27 cents on Tuesday.
"Fundamentals are taking the upper hand and an almost certain return to surplus in the coming months should encourage hedge funds to reduce their long positions," said consultants Agritel.
World shares climbed towards a four-month high amid hopes for a coronavirus vaccine, while oil gained after a sharp drop in US crude inventories signalled improved demand as economies slowly recover.
Weakness in energy markets can boost sugar production in the centre-south of Brazil where cane is used either to make the sweetener or the biofuel ethanol.
A dealer said sugar remains vulnerable to further weakness as funds are slowly liquidating their long positions, though he doubted they would build net shorts, especially if oil prices continue to improve.
August white sugar, which expires on Thursday, fell $10.40, or 3.1%, to $345.30 a tonne.
COCOA
September London cocoa fell 4 pounds, or 0.3%, to 1,557 pounds per tonne, drifting back down towards a 20-month low of 1,545 pounds set last week.
Weak demand and a generally favourable outlook for the upcoming 2020/21 harvest in top grower Ivory Coast are weighing on cocoa.
September New York cocoa rose $11, or 0.5%, to $2,166 a tonne.
COFFEE
September arabica coffee fell 0.2 cents, or 0.2%, to 97.80 cents per lb.
Sucden said arabica's recent consolidation above key technical support levels suggested prices could push back above 100 cents.
September robusta coffee fell $3, or 0.3%, to $1,218 a tonne
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