Raw sugar on ICE steadied after rising to a 6-week high on Friday, after extending gains in a technically strong market on support from a firmer Brazilian currency and possible delays to the start of the cane harvest in Brazil due to rains. Arabica coffee rose for the third straight day, also buoyed by the stronger real, while New York cocoa rose to a two-month high as the British pound firmed against the US dollar.
May raw sugar settled down 0.01 cent, or 0.07 percent, at 14.83 cents per lb, after climbing to the highest since January 19 at 14.93 cents. The contract closed the week up 5.9 percent. Technically, the sugar market is strong after rising 17 percent in the past two weeks, taking prices well above key moving day averages, traders noted. "The timing of the crop in Brazil is uncertain because of ongoing rains," said James Kirkup, head of sugar brokerage at ABN Amro in London.
He said the market was also focused on the early closure of mills in India due to a lack of cane. Michael Liddiard of consultancy Agrilion said sugar was underpinned by expectations of a global sugar deficit. "The main driver is the expected major production shortfalls for the next two years," he said. May white sugar settled up $2.90, or 0.7 percent, at $423.80 per tonne.
Coffee futures firmed, as the real gained ground after the arrest in Brazil of former president Luiz Inacio Lula da Silva. May arabica coffee settled up 3.2 cent, or 2.7 percent, at $1.2105 per lb. May robusta coffee settled down $1, or 0.1 percent, at $1,393 per tonne. Meanwhile, data showed global coffee exports were down slightly in January but have inched up 1.7 percent in the first four months of the 2015/16 marketing year.
London cocoa futures rose to near a two-month high, while traders kept careful watch on the prospect of lower mid-crops in West Africa. May New York cocoa settled up $56, or 1.9 percent, at $3,008 per tonne, after rising to $3,018, the highest since January 8. May London cocoa closed up 30 pounds, or 1.4 percent, at 2,211 pounds a tonne.