Coffee and sugar turn higher to reach 2016 peak

Arabica coffee and sugar futures on ICE turned up to reach the highest levels in 2016 so far on Wednesday, on looming supply concerns and as the currency in top grower Brazil sharply pared its losses. London cocoa steadied, supported by a weaker pound, which made positions cheaper for holders of other currencies, while the dollar-traded New York market dropped for the second straight day.
Sugar and coffee rallied as the 19-market Thomson Reuters CoreCommodity Index climbed more than 1 percent.
Arabica coffee prices surged, buoyed by tightening supply prospects and falling certified stocks. Technical buying accelerated the move higher when prices breached the 200-day moving average.
"The sentiment is turning. We're starting to trade primarily on the fundamentals," said Shawn Hackett, president of Hackett Financial Advisors in Boynton Beach, Florida.
"We've got a really big move in the cash differentials. Coffee's becoming less and less available." May arabica settled up 3.35 cents, or 2.7 percent, at $1.2905 per lb, after rising to $1.30, a five-month high on a continuation chart.
Societe Generale revised its global 2015/16 coffee supply forecast to a one million bag deficit from a 970,000 bag surplus in a report on Wednesday, citing the expectation for consumption to grow.
May robusta settled up $3, or 0.2 percent, at $1,426 per tonne.
Raw sugar turned higher as traders continued to eye global deficit forecasts due to dry weather in India and Asia, and uncertainty about how much Brazilian cane will be made into ethanol. May raw sugar settled up 0.15 cent, or 1 percent, at 15.47 cents per lb, after rising to 15.49 cents, the highest level for the spot contract since December 8.
A strong white sugar refining premium, at $101 per tonne, reflected tight supplies, and strong Chinese and pre-Ramadan demand, dealers said.
May white sugar settled up $4.20, or 1 percent, at $443.20 per tonne, after rising to $443.90, the highest since August 2014.
May London cocoa settled up 3 pounds, or 0.1 percent, at 2,261 pounds per tonne. New York May cocoa settled down $13, or 0.4 percent, at $3,040 per tonne.