Raw sugar futures on ICE settled higher on Friday, boosted by a weak dollar and dryer-than-normal weather in Brazil. Coffee and cocoa prices also rose. October raw sugar settled up 0.06 cent, or 0.4 percent, at 14.09 cents per lb, 2.5 percent higher on the week.
The market was supported by the weak dollar while speculators also continued to reduce a large net short position, dealers said. Dryer-than-normal Brazilian weather "could affect supply there and neutralize the surplus elsewhere," said Peter Mooses, senior market strategist with RJO Futures in Chicago.
Florida sugarcane areas still under hurricane watch also supported the market, said Judy Ganes, president of J Ganes Consulting in Panama. "If the US loses some of its production, then the US needs to import," Ganes said. The market was underpinned, however, by the possibility of a significant price drop triggering a shift in the use of cane in Brazil from sugar to ethanol production, said Commonwealth Bank of Australia analyst Tobin Gorey.
October white sugar settled down $2.30, or 0.6 percent, to $375.30 a tonne. November robusta coffee settled up $10, or 0.5 percent, at $1,960 per tonne, but 4.8 percent lower in the week. The prospect of an early and large crop in top robusta producer Vietnam had helped to reduce concern about supply tightness, dealers said.
December arabica coffee settled up 1.5 cent, or 1.2 percent, at $1.3065 per lb, 1.2 percent up from the week prior, buoyed by a weaker dollar. Additionally, "Below normal rainfall is expected across the majority of the coffee belt," for the next six to 10 days, said Kenny Miller of MDA Weather Services in Gaithersburg, Maryland.
Coffee stored in Miami warehouses were temporarily flagged as non-deliverable in eCOPS due to Hurricane Irma. December New York cocoa settled up $27, or 1.4 percent, at $1,933 per tonne, down 0.72 percent from the week prior. Prices rose on a slight improvement in demand, said Mooses.
"The supply looks big in the short term, but the further out, months look to be lower so that will have the prices in further out months move higher," Mooses said. December London cocoa settled up 5 pounds, or 0.3 percent, at 1,477 pounds per tonne. The rise in sterling to its highest level against the dollar on five weeks helped to cap gains in London, dealers said.
Comments
Comments are closed.