Sugar sets 23-month high as rains slow Brazil cane crush

Raw sugar futures on ICE climbed to their highest level in almost two years on Thursday as rains disrupted the cane harvest in top producer Brazil while cocoa and coffee prices also rose. July raw sugar was up 0.36 cent, or 2.1 percent, at 17.77 cents per lb at 1339 GMT after climbing to a peak of 17.90 cents, the highest level for the front month since July 2014.
"If we keep having delays (in centre-south Brazil), people will start marking down what will be crushed and harvested," James Kirkup, head of sugar brokerage at ABM AMRO Markets in London, said.
Brazil cane industry group Unica on Wednesday showed 39.5 million tonnes of cane were crushed in the first half of May, largely in line with market expectations.
Commonwealth Bank of Australia analyst Tobin Gorey said he expected much weaker production in the second half of May due to the wet conditions.
"Weather forecasters expect more rain in the region, which will at least slow down the drying process. We expect wet conditions to hamper production in early June as a result too."
August white sugar was up $8.40, or 1.7 percent, at $490.00 per tonne.
Cocoa futures were higher as the market continued to be underpinned by poor prospects for mid-crops in West Africa.
"The market is expecting poor mid-crop arrivals throughout the rest of the summer," one London dealer said.
Dealers also said recent rains may have improved prospects for the start of the 2016/17 main crop in October although the outlook could easily change in coming weeks.
"We've seen some better rains in Ivory Coast (recently) and we are waiting to see how the new (pod) setting looks for the start of the main crop," the dealer said. September New York cocoa was up $24 or 0.8 percent at $3,051 a tonne while September London cocoa rose 17 pounds or 0.8 percent at 2,233 pounds a tonne.
Arabica coffee futures also edged up, boosted partly by declining certified stocks, with July up 0.40 cents, or 0.3 percent, at $1.2230 per lb.
Meanwhile, rains in Brazil's Sao Paulo and Parana in the coming days will limit coffee harvesting, Maryland-based MDA Information Systems said in a report.
July robusta was down $1, or 0.06 percent, at $1,645 per tonne.