Sugar rebounds

Raw sugar futures on ICE bounced higher on Wednesday, after failing to make a new 6-1/2-year low, while cocoa fell back from the prior session's 8-1/2 month high. Robusta coffee was mostly lower, although the spot contract's premium to September sharply extended its rise to the highest in more than a year as July options expired. Arabica coffee fell as July/September spreading boosted volume.
Raw sugar prices initially extended last week's losses on large stocks, favourable cane harvest weather in Brazil, higher-than-expected output in India and Thailand, and fund selling. After failing to breach the prior session's 6-1/2-year low, chart-based buying and support from the softer dollar caused prices to turn higher. July raw sugar on ICE settled up 0.04 cent, or 0.4 percent, at 11.35 cents a lb, after tapping 11.3 cents, a 6-1/2-year low reached on Tuesday.
"Weather in center-south Brazil has been good for harvesting recently," said Nick Penney, a senior trader with Sucden Financial Sugar. "Reports are that only one to two days have been lost to rains so the next UNICA (Brazil cane industry) report should show a crush number (in the first half of June) of around 41 million tonnes of cane and an increase in sugar content." August white sugar finished up $1.20, or 0.4 percent, at $345.40 a tonne, after touching a contract low of $343.60.
Cocoa futures fell from the highest levels since September 2014 reached on Tuesday, as the markets corrected lower after rallying for three straight days on crop concerns in West Africa. New York September cocoa closed down $13, or 0.4 percent, at $3,222 a tonne. It had peaked at $3,241 on Tuesday, its highest since late September 2014. September London cocoa ended down 16 pounds, or 0.7 percent, at 2,131 pounds a tonne.
July robusta settled up $13, or 0.7 percent, at $1,806 per tonne, buoyed by the dealings in July options, which expired earlier in the session. Of the $1,800 calls, where there was heavy open interest, 2,625 lots were exercised while 2,331 lots were abandoned, exchange data showed. September robusta closed down $4, or 0.2 percent, at $1,750 a tonne. The move caused the July/September spread to extend its rally to as high as a $62 premium, the highest on a spot continuation chart since March 2014. September arabica closed down 2.6 cents, or 2 percent, at $1.294 per lb.