US cocoa soared above its long-term moving averages to close at a two-month peak on Tuesday, while raw sugar also finished firm, paring losses after hitting a contract high on concern about a smaller Brazilian crop. Arabica coffee futures also finished strong as the commodity complex gave spillover strength while a lack of producer selling allowed the market to climb easily.
October> climbed 0.35 cent, or 1.3 percent, to finish at 27.60 cents a lb, after hitting a contract high at 28.32 cents. Market boosted by talk of smaller Brazilian crop, port congestion and brisk cash demand, said brokers. Alex Oliveira, senior sugar analyst at brokerage Newedge USA, said a reduced Brazilian cane harvest should lead to downward revisions in forecasts of a sugar surplus.
The market is looking at "a very low crop in Brazil and low yields," he said. Spot raw sugar contract running at a premium and deliveries at lowest for the year, reflecting cash demand in the market. September arabica coffee futures jumped 5.95 cents, or 2.3 percent, to end at $2.6960 per lb. Broad-based commodity buying helped lift the market, said traders.
A lack of origin selling allowed the market to climb easily in thin dealings as producers waited above the market, said traders. Vietnam is expected to export between 45,000 tonnes and 70,000 tonnes, or 750,000 and 1.17 million bags, of coffee this month, down from an estimated loading of 80,000 tonnes in June, further pushing up premium levels, traders said on Tuesday. ICE certified arabica stocks eased by 2,221 bags to 1,620,078 bags by June 30, with 10,665 bags pending grading, according to ICE data.
Key September cocoa futures jumped $72, or 2.3 percent, to settle at $3,227 a tonne, the highest settlement for the contract since May 3. Chart-based buying helped lift prices after September climbed above the 200-day moving average last week and soared above the 100-day moving average at $3,152, the day's session low, on Tuesday.
Rains in Ivory Coast's key cocoa growing regions last week were ample for the development of the mid-crop until late August, but cloudy weather raised concerns about pests, said farmers. Cocoa purchases in world No. 2 grower Ghana reached 940,000 tonnes by mid-June, putting output over 50 percent ahead of last year, said Cocobod.