London sugar futures closed firmer on Tuesday on end-destination buying after a choppy session dominated by arbitrage, spread activity and speculative selling pressure from the New York market, dealers said. Benchmark March settled up $1.2 at $338.2 per tonne after trading from $335.4 to $338.5. May finished up $1.5 to $327.5 per tonne.
"There was a lot of end-destination buying late in the session. There is a feeling that supplies of whites will be tight in the coming months," one trader said. London traders talked of active arbitrage between the London white futures and the New York (NYBoT) raw futures market in the afternoon, with a widening whites-over-raws premium.
"London has been reluctant to move lower and has not fallen as much as New York, which has been hit by spec selling," one trader said mid-afternoon, noting that the London March-New York March premium had widened to $106 from $101 on Monday. Traders referred to a lack of available white sugar for delivery against expiry of the March contract on February 13.
COCOA ENDS FIRMER: London cocoa futures settled firmer on Tuesday after a session dominated by spreads and underpinned by growing concerns over dry weather in West Africa, dealers said. March finished up nine pounds to 889 pounds per tonne in volume of 2,936 lots, after trading from 890 to 876. May closed up nine pounds to 906 pounds in volume of 2,053 lots, having moved from 908 to 893. Total volume was a modest 5,743 lots.
COFFEE CREEP HIGHER: London robusta coffee futures put in a mixed performance on Tuesday, chopping either side of unchanged but finally closing with modest gains as smaller speculators dipped in and out of the market.
Producer selling continued to drip into the market, keeping a lid on things, while roasters were placing offers in forward months, coupled with some trade buying.
At the close, benchmark March coffee rose $5 to $1,585 a tonne, its high for the day, but still well within the range it has traded since November last year.
Front January ended at $1,608 from $1,599 at tonne. Traders said volume of 13,320 lots was again taken up mostly by spread business.
January futures expire on Wednesday and funds will be looking to roll their long positions in March, estimated by some at up to 35,000 lots, through to May. Overall sentiment was generally upbeat ahead for the robusta market, with strong demand seen for the beans used in blends and to make instant coffee.