Sugar closed at eight-month highs for a second straight day on Wednesday, supported by signs the crop in top producer Brazil might be smaller than forecast and by earlier strength in US corn. Coffee and cocoa settled mixed as US markets took support from a weaker dollar, which fell after Federal Reserve meeting minutes released the previous day reinforced expectations of more monetary easing in the United States.
"The sugar price is certainly high and it's to do with the dollar and Brazil crop being smaller than expected," Andrey Kryuchenkov of VTB Capital said. Analysts have reduced estimates for the centre-south crop, which comprises about 90 percent of Brazil's cane output. Brazil accounts for about half the world's sugar trade.
ICE front-month raw sugar futures appeared poised to test the psychological 30 cents a lb area soon, dealers said, although they were viewed as technically overbought. Benchmark March raw sugar futures on ICE closed up 0.05 cent at 27.50 cents per lb, the highest settlement since February 11 but below the session peak at 28.04 cents. ICE March arabica coffee futures gained 0.45 cent to finish at $1.8615 per lb. ICE December cocoa rose $17 to settle at $2,867 per tonne.