Sugar futures bounced back Thursday after a five-day losing streak, as some buyers showed up after a precipitous drop in sugar prices.
Raw sugar for March delivery added 2.8% to 18.53 cents a pound on the ICE Futures U.S. exchange, after falling to as low as 17.84 cents in early trading.
“There may be some demand to show up at these lower levels,” said Jack Scoville, an analyst at the Price Futures Group.
Sugar’s gains on Thursday were also supported by firmer oil prices, as higher oil prices tend to encourage sugar mills to switch cane production toward ethanol.
The recent erosion in sugar prices was caused by an absence of fresh bullish news that could further support the sugar rally started in mid-February. Moreover, some trading houses began to predict a global surplus in sugar market for the next season, due to record production. This has scared away many bulls in the sugar market, where there was still a net long position of 174,459 contracts as of last Tuesday.
In other markets, cocoa for March lost 3.2% to $2,243 a ton, arabica coffee for March was down 1.3% to $1.4230 a pound, frozen concentrated orange juice futures for January lost 2.3% to $1.9690 a pound and March cotton was up 0.1% to 71.57 cents a pound.