Raw sugar futures rose towards the previous session's more than one year high on Monday with the market boosted by the strength of Brazil's currency while arabica coffee and cocoa prices fell. May raw sugar was up 0.6 percent to 16.07 cents a lb at 1500 GMT, having peaked at 16.10 cents on Friday - the highest level for the front month since January 2015.
Dealers said that weekly charts looked bullish after last week's strong performance, while a slight strengthening in the Brazilian real reduced the incentive for the world's top producer to export. The market appeared susceptible, however, to a downward correction in the near future, with technical indicators showing sugar was heavily overbought.
Speculators upped their bullish position in raw sugar in the week to March 15, Commodity Futures Trading Commission data showed on Friday. Dealers said their net long had increased further as prices advanced during the second half of last week. "I think they are getting near their max," one dealer said.
May white sugar was up $2.30, or 0.5 percent, at $453.10 a tonne. Arabica coffee futures were lower, with the market suffering a setback after last week's strong advance as a short-covering rally ran out of steam. Dealers said the market may also have been weighed down by some arbitrage selling of arabica coffee and buying of robustas. May arabica coffee was off 1.9 percent at $1.3170 per lb.
The market had spent several months drifting in a fairly narrow trading range but finally broke out last week as the May contract climbed to a five-month high of $1.35. May robusta coffee was up 0.1 percent at $1,484 a tonne. "There is industry buying around here and not a great deal of Vietnamese selling. The arbitrage has also moved a fair bit recently, so I think there is a correction back on that," one London dealer said.
Cocoa futures were lower on favourable crop weather in top grower Ivory Coast. Abundant rains and sunny spells helped growth in most of Ivory Coast's main cocoa-growing regions last week, triggering new foliage that is expected to continue into next month and lead to increased output from June, farmers said on Monday. May New York cocoa was off 0.9 percent at $3,089 a tonne. The weakness of sterling helped to limit losses in London cocoa, with May down 6 pounds at 2,250 pounds a tonne.
Comments
Comments are closed.