Sugar extends gains, cocoa eases

ICE raw sugar jumped to a 4-1/2 month high on Thursday on chart signals, expectations of higher demand for cane-based ethanol, and news of a trading house taking a substantial cash delivery against the October contract expiry. Cocoa and coffee futures fell. The front-month March 2016 raw sugar contract on ICE Futures US closed up 0.38 cent, nearly 3 percent, at 13.26 cents per lb, settling near the session's 4-1/2 month high of 13.27 cents.
Sugar extended its rally as traders raced to cover short positions as prices climbed above key chart levels and after oil major Petrobras said it would raise fuel prices, a move expected to boost demand for ethanol and divert cane supplies away from sugar production in the world's top producer. Prices also found support in news that Wilmar International bought its third straight raw sugar purchase through the exchange, scooping up 1.2 million tonnes against the contract that expired on Wednesday. "A lot of the move is technical... and the trade is seeing the expiry as more positive than negative," said a European broker. Only a small portion of the delivery was due from Thailand, a sign of fewer supplies in Asia than expected, he said.
ICE December white sugar finished up $8.40, or 2.3 percent, at $378.40 per tonne. In cocoa, the December London ICE contract settled down 8 pounds, or 0.4 percent, to 2,132 pounds a tonne and the December New York contract edged down $9, or 0.3 percent, to finish at $3,105 per tonne. The 2015/16 crop in No 2 grower Ghana was forecast at 800-900,000 tonnes amid worries over weather and pests, the International Cocoa Organisation said after the market closed.
ICE December arabica coffee finished down 0.60 cent, or 0.5 percent, at $1.2075 per lb, pressured by currency gyrations. The Brazilian real, again lost ground, making dollar-traded commodities more valuable in local currency terms and boosting the incentive to sell coffee in world's largest producer of arabica. November robusta coffee on ICE finished down $1, or 0.1 percent, at $1,556 a tonne.