ICE raw sugar futures jumped to a six-week high on a short-covering on Monday, the first trading day of the fourth quarter following a sizeable delivery, while arabica coffee climbed on support from the weak US dollar. Cocoa dropped as crop weather improved in top grower Ivory Coast.
Trading was halted for more than 30 minutes on NYSE Liffe commodity markets in London, due to a technical issue, before resuming. Raw sugar futures trading on ICE Futures US soared closer toward their 100-day moving average as short-covering triggered waves of automatic buy orders, dealers said.
ICE March raw sugar futures surged 0.71 cent, or 3.5 percent, to settle at 21.13 cents per lb, the highest settlement in six weeks and near the 100-day moving average at 21.34 cents. "It looks like we hit some patches of stops in there," said Sterling Smith, futures specialist for Citigroup in Chicago.
James Kirkup, head of sugar brokerage at ABN Amro Markets, echoing the views of other dealers, said sugar prices were being driven up by a short covering rally. Raw sugar futures trading on ICE Futures US finished the third quarter of 2012 on Friday down 10.2 percent, tumbling for the second straight quarter. Expectations of a big global surplus of the sweetener, and brisk harvesting in top grower Brazil, have weighed on sugar futures prices, dealers said.
Dealers digested official confirmation of a substantial delivery against expiry of the ICE October raw sugar contract, on a global surplus. Sugar deliveries on the spot October contract on ICE Futures US reached 11,710 lots, or 594,895 tonnes, ICE Futures US data showed. December white sugar on Liffe rose $7.60, or 1.3 percent, to close at $582.10 per tonne in thin dealings.
Arabica coffee also rose, supported by the weaker dollar against a basket of currencies, as attention turned towards the main harvest in Colombia, the world's largest producer of high quality arabica coffee. Last month, exporters and analysts said Colombia's main coffee harvest was expected to rise as much as 30 percent from the 2011/12 crop year. ICE December arabica coffee futures settled up 4.55 cents, or 2.6 percent, at $1.7805 per lb.
Arabica coffee futures trading on ICE Futures US finished the third quarter of 2012 on Friday up 2.1 percent, their biggest quarterly rise since the first quarter of 2011. November robusta coffee futures fell $3, or 0.1 percent, to close at $2,179 a tonne. Cocoa futures dropped, despite the weak dollar, as dealers' eyes turned to improved weather in Ivory Coast.
ICE December cocoa closed down $66, or 2.6 percent, at $2,450 per tonne, in a technical correction after futures closed the third quarter up 9.9 percent on Friday, their biggest quarterly surge since the third quarter of 2009. Concerns over development of main crops in West Africa, underpinned prices. Liffe December cocoa closed down 51 pounds, or 3.1 percent, at 1,580 pounds per tonne. Speculators reduced net long positions in cocoa, robusta coffee and white sugar futures and options on NYSE Liffe in the week to September 25, exchange data showed on Monday.
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