Raw sugar futures on ICE firmed on Wednesday, supported slightly by a stronger Brazilian currency, while arabica coffee turned lower and cocoa prices pared gains the day before an eagerly awaited statement from the US Federal Reserve. All contracts traded within their recent ranges. “Everyone is waiting for this Fed decision tomorrow, so who’s going to make any big bets now?” said Shawn Hackett, president of Hackett Financial Advisors in Boynton Beach, Florida.
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) on Thursday after a two-day meeting. “Some of the money that likes to get in early is starting to nibble at things just in case this is the turn,” Hackett said. “Commodities may clearly be a place where some of this money may decide to go into as a reallocation of capital.”
Raw sugar futures traded on both sides of unchanged in heavy volume. The firming of the real against the dollar lent some support, but the Brazilian currency’s general weakness meant raw sugar futures risked falling further. October raw sugar futures settled up 0.07 cent, or 0.6 percent, at 11.47 cents per lb.
In white sugar, 114,450 tonnes were delivered against the October expiry on Tuesday, ICE said, while traders said the sole buyer was expected to be Cargill Inc and Copersucar’s Alvean joint venture. “The receiver probably has homes for the sugar,” a senior London broker said. “It looks like decent competition to sugars in Brazil.” December white sugar futures settled up $2.10, or 0.6 percent, at $357.50 per tonne, after October expired at a discount of $8.50 to the contract on Tuesday.
Arabica coffee futures edged lower as the harvest wrapped up in top grower Brazil and recent rains there augured well for a good crop next year. December arabica settled down 0.6 cent, or 0.5 percent, at $1.181 per lb, within sight of Friday’s 20-month low at $1.16. Second-month robusta coffee futures settled up $5, or 0.3 percent, at $1,581 per tonne. London December cocoa gained 5 pounds, or 0.2 percent, to end at 2,189 pounds a tonne, while New York December cocoa settled up $29, or 0.9 percent, at $3,267 per tonne.