Raw sugar steadies

Raw sugar futures on ICE steadied on Thursday, on uncertainty ahead of the much-anticipated US Federal Reserve statement, while their spot spread narrowed to the smallest discount since January. Cocoa and arabica coffee futures inched higher, but all three markets remained well within recent ranges.

“They’re going sideways because people have cleared the dance floor a little bit because they don’t know what the next song is going to be,” said David Martin, founder and managing member of Martin Fund Management LLC in New York. “People are really taking a wait-and-see attitude.”

Investors braced for the possibility of the first US interest rate in nearly a decade, with the Fed scheduled to release a statement at 2 pm EDT (1800 GMT) after the soft commodity markets close, following a two-day meeting. “I would expect the market to possibly falter once again if the (US) interest rates are increased,” a senior London-based broker said.

October raw sugar futures settled down 0.03 cent, or 0.3 percent, at 11.44 cents per lb. The October/March spread narrowed to as much as a 0.75-cent discount, compared with 0.86 cent on Wednesday and the smallest since January, ahead of the spot contract’s expiry at the end of the month. December white sugar futures settled down $2.80, or 0.8 percent, at $354.70 per tonne.

Nick Penney, a senior trader with Sucden Financial Sugar, said, “Currency and weather are the main drivers for the short term. The macro reaction for commodities in general after tonight’s rate decision in the US may sweep sugar with it.” Commodities such as sugar and coffee are priced in dollars, making them more expensive for holders of other currencies when the dollar strengthens. Arabica coffee futures hovered above last week’s 20-month low at $1.16 per tonne.

December arabica settled up 0.45 cent, or 0.4 percent, at $1.1855 per lb. Second-month robusta coffee futures finished down $17, or 1.1 percent, at $1,564 per tonne. European traders are calling for exchanges to consider launching a “free on truck” robusta coffee futures contract to help smaller players compete. London December cocoa closed up 8 pounds, or 0.4 percent, at 2,197 pounds a tonne. New York December cocoa settled up $15, or 0.5 percent, at $3,282 per tonne, after total open interest jumped by nearly 3,200 lots to 197,020 lots on Wednesday, the highest since August 6, ICE data showed.



This post is published by AgriHunt staff member. If you believe it should have your name please contact [email protected]

Articles: 1074

Leave a Reply

Your email address will not be published. Required fields are marked *