Raw sugar futures rose on Friday, boosted by signs of weaker monsoon rains in No. 2 grower India and spillover support from larger commodities, while the spot London cocoa contract's premium over September vaulted. The 19-market Thomson Reuters CoreCommodity Index rallied around 1.6 percent, its strongest one-day rise in more than two months as the US dollar fell against a basket of major currencies.
October raw sugar settled up 0.2 cent, or 1.6 percent, at 12.41 cents per lb. For the week, it closed up 0.5 percent following two straight weeks lower. Prices rose in part due to the crucial monsoon period in India, where rainfall was reported to be some 9 percent lower than normal so far in June.
"Everyone is watching for what will make this market rally," said one European dealer. "We could see some of that if we have monsoon rains that disappoint." Support also came from chart-based dealings after the most-active October contract opened just above the 50-day moving average, traders said.
August white sugar settled up $2.70, or 0.8 percent, at $344.50 per tonne. September London cocoa settled down 11 pounds, or 0.6 percent, at 1,804 pounds per tonne. Prices were pressured by much-needed rain in West African growing regions, with more forecast for next week, traders said. The July premium over September rallied to as high as 42 pounds, a dramatic move from last week's discount of 46 pounds.
"London has someone caught short," one trader said, explaining the reason for the spread's rally that likely attracted short-covering by speculators. The move came ahead of the July contract's expiry on July 16, ICE data showed. September New York cocoa settled up $1, or 0.04 percent, at $2,514 per tonne. For the week, it closed down for the fifth week out of the past six.
Top cocoa producer Ivory Coast could grind 50 percent of its current output locally by 2022, boosted by fiscal measures and incentives given to companies in the sector, the deputy head of the Coffee Cocoa Council said. September arabica coffee settled up 0.7 cent, or 0.6 percent, at $1.1695 per lb. September robusta coffee settled up $4, or 0.2 percent, at $1,705 per tonne. Indonesia's growing appetite for coffee has squeezed supplies of premium beans, leaving less coffee for export and forcing up prices for foreign buyers.