Liffe August white sugar ended $19.30 higher at $876.30 a tonne on Wednesday after earlier setting a record peak of $890.10. Market boosted by strong gains across commodities linked to a weaker dollar as well as to diminishing prospects for the crop in top producer Brazil.
Liffe September robusta coffee ended $40 higher at $2,331 a tonne, swept higher in the broad-based commodity markets advance. Liffe September cocoa ended 50 pounds higher at 1,986 pounds a tonne, tracking other commodity markets. Firm softs prices were in line with a rebound across commodities, boosted by a weaker dollar, after several sessions of investor selling on eurozone debt and global growth concerns. "The steep uptrending channel begun on July 1 is still in place, notably yesterday resistance was breached near 30.27 cents a lb," Brenda Sullivan, technical analyst at Sucden, said.
"The close above that last night and the holding above that today still keeps attention on the target area of 30.77 cents," Sullivan said, noting support was seen at 29.74 and 28.80 cents. Raw sugar futures have risen by around 40 percent in the past two months on diminishing crop prospects in top producer Brazil, but some dealers believe the move is overdone and prices could tumble, given a global sugar surplus is forecast for 2011/12.
"In the short term, we expect sugar prices to gain further as, while the market is still expecting a return to a surplus, recent concerns over the Brazilian crop on ageing cane and low sucrose content has seen continued mark-downs in supply estimates," Barclays Capital said in a daily commodities note. Dealers awaited an update on Brazil production, due later in the session, from the country's cane industry group Unica.