Raw sugar futures rose on Thursday, correcting up from the prior session's 3.6 percent slump on support from the weak US dollar, while New York cocoa extended gains to a two-month high. The move came as the 19-market Thomson Reuters CoreCommodity Index rose for the first time this week.
March raw sugar settled up 0.14 cent, or 1.1 percent, at 13.37 cents per lb. The correction higher came after total open interest rose by 7,967 contracts to 933,927 contracts on Wednesday when spot futures fell 3.6 percent, ICE data showed. Prices were supported on Thursday by the softer dollar index, traders said.
The bounce came after the spot contract closed January down 12.7 percent, its weakest monthly performance in 10 months as market participants focused on abundant global supplies amid strong production in the EU, Thailand and Pakistan. "Sugar prices will remain weak in the coming weeks as global supply is currently ample amidst robust production growth in all major producers in the ongoing 2017/18 season," said BMI Research in a note, forecasting an average price of 13.5 cents in 2018.
May white sugar settled up $1, or 0.3 percent, at $357.50 per tonne. Dubai's Al Khaleej Sugar Refinery, the world's largest port-based refinery, produced 1.8 million tonnes of white sugar in 2017, state news agency WAM said on Thursday. March New York cocoa settled up $21, or 1.1 percent, at $2,017 per tonne, after rising to $2,037, the highest since Dec. 4.
The contract extended gains after rising above its 200-day moving average and was boosted by the firm British pound versus the US dollar. This has improved the arbitrage and encouraged buying in the New York market, dealers said. March London cocoa settled up 9 pounds, or 0.6 percent, at 1,408 pounds per tonne.
March arabica coffee settled down 0.45 cent, or 0.4 percent, at $1.214 per lb, dropping for the fourth straight session. Prices have been pressured by speculative short-selling coupled with expectations for a surge in production from top grower Brazil. March robusta coffee settled up $7, or 0.4 percent, at $1,769 per tonne.
Vietnamese farmers were reluctant to sell beans due to the recent slump in prices, traders said. Indonesia's 2018 coffee output is seen at around 500,000 tonnes, down about a fifth from a year earlier, the Association of Indonesian Coffee Exporters and Industries told Reuters.