Raw sugar rebounds after sharp selloff
Raw sugar futures rose on Friday as the market showed signs of resuming its upward trend, on tightening global supplies, after a sharp setback this week. ICE Oct raw sugar was up 0.17 cent, or 0.9 percent, at 19.77 cents per lb by 1143 GMT, after hitting a one week low earlier on Friday at 19.50 cents.
The front month hit a one-month high of 20.92 cents on Monday but then fell back sharply this week as investors took profits on recent gains. Dealers said the market remained supported by the prospect of global deficits in both the 2015/16 and 2016/17 seasons and sugar’s strong performance this year was prompting funds to hold a large net long position in the sweetener. “We regard the long term outlook as potentially very bullish,” said Michael Liddiard of consultancy Agrilion. “All the attempts to shake out the funds have not worked.”
October white sugar was up $1.90, or 0.4 percent, at $534.60 per tonne. Arabica coffee futures were little changed, with September off 0.04 percent at $1.3795 per lb. The most active contract dipped to a low of $1.3655 per lb on Thursday, its weakest level since late June. Dealers said one factor weighing on the market recently were better-than-expected arabica yields in Brazil. Analysts Safras & Mercado estimated the harvest was 81 percent complete by Aug. 10. September robusta coffee was off 0.2 percent at $1,805 a tonne. Robusta prices had been underpinned by the prospect of a global deficit in the 2016/17 season.
December New York cocoa was down $14, or 0.5 percent, at $2,979 per tonne. Dealers said the market was still supported by an expected large global cocoa deficit in 2015/16 although a switch to a global surplus is anticipated in the upcoming 2016/17 season. Olam’s CEO forecast on Friday there would be a global cocoa deficit of 320,000 tonnes in the current 2015/16 season, wider than the median estimate of 245,000 tonnes in a Reuters poll issued in late July. The Reuters poll had a median forecast for 2016/17 of a global surplus of 114,500 tonnes. December London cocoa was down 6 pounds, or 0.25 percent, at 2,371 pounds per tonne.