Sugar futures on ICE turned lower on Tuesday as buyers stepped to the sidelines, but the spot white premium remained firm as traders focused on Chinese demand, while the strengthening British pound helped New York cocoa bounce up. Coffee futures were little changed, with robusta prices pressured by a big carryover into the 2015/16 harvest in top grower Vietnam.
March raws settled down 0.08 cent, or 0.6 percent, at 14.02 cents per lb. The market fell for the third straight session after open interest surged to a seven-month high on Monday, indicating that short-selling helped push prices down more than 2 percent in the prior session, exchange data showed.
"The market remains above critical support levels, and the longer it stays there, more confidence will return and the range will hold," said Sucden Financial Research senior trader Nick Penney. March whites settled down $1.60, or 0.4 percent, at $419.40 per tonne, while the March/May spread inched up after the prior session's tumble. The whites-over-raws premium traded at a five-month high above $110 per tonne this week.
"There is good demand for white sugar going to China," a senior European analyst said. Prospects for continued strength in the white sugar premium will depend on whether surging demand in China is sustained, but adverse weather there is likely to keep refining margins strong. Cocoa futures turned higher along with the British pound. March New York cocoa settled up $10, or 0.4 percent, at $2,829 per tonne. Citi Research pegged prices at an average range of $2,900 to$3,000 in 2016, 7 percent below a prior forecast.
March London cocoa settled down 8 pounds, or 0.4 percent, at 2,041 pounds per tonne. In robusta coffee, dealers said they expected a pickup in producer selling before the Vietnamese New Year holidays, known as Tet, which start around February 8.
March robusta settled up $1, or 0.1 percent, at $1,390 per tonne. March arabica futures settled up 0.25 cent, or 0.2 percent, at $1.167 per lb. "We believe coffee will underperform sugar over the course of 2016, as a significant decline in the Brazilian real will more negatively affect coffee prices," BMI Research senior commodities analyst Cole Martin said in a report.
Comments
Comments are closed.