Sugar jumped 4 percent on Wednesday as it rode the coattails of a commodities rebound, while dealers eyed the mounting queue of ships off the coast of top exporter Brazil. Coffee and cocoa also gained in the commodity-wide rally.
ICE raw sugar futures gained for a fifth day, their longest winning streak this year, rebounding from a recent eight-month low as traders began to fret over the slow start to the Brazilian harvest that has left 58 ships stranded waiting for cargo. And while cocoa and coffee also showed signs of staunching their steep sell-off this month, trading volume that was more than a third below the 30-day average suggested investors were not yet rushing back into the market. Coffee has fallen 12 percent since a 34-year high on May 3.
"People are not going to put on a big position until they have a better idea of where the market's going to go, and then they'll come back in," said Bill Raffety, senior analyst for futures brokerage Penson Futures.
The Reuters-jefferies CRB index, a global benchmark for commodities, surged 2.2 percent and was headed for its biggest gain in two months as buyers emerged for oil and other raw materials that had cheapened by the recent sell-off. ]
"We're getting a pretty good technical bounce here," said Sterling Smith, analyst for Country Hedging in Minnesota. "I think that's working to provide a lift to several markets that had become rather oversold."
ICE July raw sugar futures jumped 0.92 cent, or 4.2 percent, to finish at 22.85 cents a lb.
Arabica coffee futures surged over 3 percent before paring gains, correcting up after the recent drop in commodity markets. Volume was just over 14,000 lots, down 36 percent from the 30-day average, preliminary Thomson Reuters data showed.
ICE July arabica coffee rose 3.95 cents, or 1.5 percent, to close at $2.7005 per lb.
ICE July cocoa finished up $15 at $2,995 per tonne, although total volume was just under 10,000 lots, about half of the 30-day average as dealers waited for more details on the Ivorian midcrop to emerge.