Raw sugar rallies to four-week high, Arabica coffee jumps

Raw sugar futures on ICE surged to a four-week high on Wednesday, boosted by technically-driven buying above the prior session high, while arabica coffee bounced further away from the prior session's 12-year low as the Brazilian currency firmed off recent lows. October raw sugar rose for the fifth straight session to settle up 0.25 cent, or 2.4 percent, at 10.89 cents per lb, after climbing to 10.97 cents, the highest since Aug. 9.
Short-covering was triggered above Tuesday's session high of 10.97 cents, lifting prices higher, while stiff resistance was seen at 11 cents, dealers said. While some fundamental support came from lower revisions to global 2018-19 surplus forecasts, the prospect of a surge in exports from India remained a bearish factor, they said.
India is likely to export 4 million to 6 million tonnes of sugar in 2018-19 as production could hit a record high, the head of Sucden India said. December white sugar settled up $7.20, or 2.2 percent, at $334.20 per tonne. The October white premium over the raws rose for the fourth straight session to around $94.30, a contract high.
December arabica coffee settled up 2.35 cent, or 2.3 percent, at $1.038 per lb. The second month rose for the first time in six sessions after slumping to a 12-year low of 98.65 cents on Tuesday. Prices rose on short-covering, with speculators holding a large net short position, as well as some support from a slight move higher in top grower Brazil's currency, the real, against the US dollar, traders said.
Expectations for Brazil's 2018-19 crop to be a record prevented stronger gains, they said. "We anticipate prices to remain under pressure and believe there is room on the downside for losses through 98 (cents per lb) in the medium term," Sucden Financial analyst Geordie Wilkes said in a market note.
November robusta coffee settled up $26, or 1.8 percent, at $1,501 per tonne. The second month had slumped to a 2-1/2-year low of $1,465 on Tuesday. December New York cocoa settled $21 lower, or down 0.90 percent, at $2,311 per tonne, changing direction sharply after earlier rallying to $2,372. Futures were choppy as the market lacked a clear overall trend, traders said. December London cocoa settled down 18 pounds, or 1.1 percent, at 1,672 pounds per tonne.