Raw sugar futures on ICE eased in late trade on Friday after hitting a seven-week high on support from tax changes in top producer Brazil that could make it more attractive to use sugar cane to produce ethanol. Coffee and cocoa futures rose as the market awaited Commitment of Traders data to be issued later on Friday.
October raw sugar closed down 0.01 cent, or 0.07 percent, at 14.40 cents per lb, after rising to 14.69 cents, the highest since June 1. Prices fell during the last three minutes of trade. The spot contract closed the week higher for the fourth straight week.
Dealers said news that Brazil would raise its federal fuel taxes was supportive. The move will likely widen the difference between gasoline and ethanol prices. "That makes ethanol more competitive," said Carlos Mera, senior commodities analyst at Rabobank. "Which means mills - more likely towards the end of the season - are likely to produce more and more ethanol."
An increase in the use of sugar cane to produce ethanol would curb sugar production. Dealers said the market had been supported this week by talk that a cold snap had caused some crop damage in Brazil. October white sugar settled down $1.50, or 0.4 percent, at $394 per tonne.
September arabica coffee settled up 1.55 cents, or 1.15 percent, at $1.3655 per lb, its fourth consecutive weekly gain. September robusta coffee settled up $30, or 1.4 percent, at $2,143 per tonne. One trader said prices were supported by a weaker dollar index, which reduced exporters' incentive to sell the dollar-traded commodity.
September London cocoa settled up 13 pounds, or 0.8 percent, at 1,561 pounds per tonne. Second-quarter North American grind data fell 1.05 percent from a year ago, coming in at the low end of expectations, but the market largely shrugged it off. "I thought it was a little disappointing, but the market obviously didn't because it didn't go anywhere," said Jack Scoville, a vice president with Price Futures Group in Chicago. September New York cocoa settled up $12, or 0.6 percent, at $1,968 per tonne. The spot contract closed the week up 4.9 percent, its strongest weekly gain in 10 weeks.