Raw sugar futures on ICE closed stronger on Monday, bucking the day's weak trend in commodities as the volatile market bounced off strong support and retraced some of last week's sharp losses. Coffee, cocoa and white sugar futures joined the commodity complex and equity markets and settled lower in light dealings ahead of the US Thanksgiving holiday Thursday, as political turmoil clouded Ireland's bailout deal.
The Irish debt bailout initially sparked gains in stocks and commodities although the impact was short lived as concerns emerged over a possible spread of debt problems to other highly indebted eurozone countries. Raw sugar futures corrected higher, partially retracing Friday's steep 7 percent losses following China's decision to raise banks' reserve requirements, finding strong support just above 25 cents per lb, basis March, traders said.
March raw sugar futures on ICE rose 0.35 cent or 1.3 percent to settle at 26.50 cents per lb. "From our perspective, the market is really being dominated by algorithmic and spec traders," said Jeff Bauml, a senior vice president with R.J. O'Brien & Associates. Raw sugar prices have been volatile and underpinned by tight global supplies with March futures peaking at 33.39 cents a lb on November 11, a 30-year high. The spot contract then fell a drastic 20 percent by the end of the next session and has been bouncing around for the past week.
Coffee futures also turned lower, tracking a broad-based setback in commodities markets with March arabica futures on ICE easing 4.10 cents or 1.9 percent to close at $2.0715 per lb, well below an early high of $2.1325. Total volume, however was light at just over 8,000 lots, the lowest in more than eight months, preliminary Thomson Reuters data showed. March cocoa futures on ICE eased $29 to finish at $2,839 per tonne.