Sugar steadies

Raw sugar futures on ICE were little changed on Friday in the face of a continued commodities selloff, steadied by limited short-covering and physical buying above a 33-month low touched earlier this week. ICE arabica coffee inched up in heavy trading, headed for a weekly gain, and ICE cocoa fell, weighed by options-related dealings. 

The Thomson Reuters/Jefferies CRB Index was headed for a fifth straight daily decline and its largest weekly loss since October after US government data showed American employers added fewer jobs than expected in March. Commodities fell this week amid concern over the strength of the global economic recovery. Still, raw sugar futures and coffee futures avoided steep losses and were seen benefiting from investors’ efforts to remove risk. 

Because speculators hold large net short positions in both ICE raw sugar and arabica coffee contracts, prices are buoyed when they cover their positions. May raw sugar futures settled down 0.02 cent, or 0.1 percent, at 17.65 cents a lb. The front-month contract was little changed from last Friday’s close, despite a fall to 17.47 cents on Wednesday, the lowest level since July 2010. That decline drew in buying, traders and analysts said, even as expectations of record global production and stagnating demand persisted. “New York is finding support near the 17.50 cents level on both May and July contracts, both from end-users and trade short-covering,” Nick Penney of brokerage Sucden Financial said. 

Sugar also felt pressure from falling corn prices, some dealers said. Corn fell after a US government report last week showed higher stockpiles than expected. Both sugarcane and corn are used as feedstocks to produce biofuel. May white sugar on Liffe finished up 10 cents, or 0.02 percent, at $504.5 a tonne. ICE May arabica coffee futures rose 0.65 cent, or 0.5 percent, to settle at $1.4015 per lb, after mixed trading throughout the session. The spot month posted a weekly gain of more than 2 percent. 

Trading volumes were heavy at more than 46,000 lots compared with a 30-day average of about 23,000 contracts, preliminary Thomson Reuters data showed. July robusta coffee futures on Liffe fell $3, or 0.1 percent, to close at $2,054 a tonne, as the trade held off buying into the falling market. May cocoa on ICE fell $9, or 0.4 percent, to close at $2,132 a tonne, down 1.8 percent for the week. That was the spot month contract’s largest weekly loss since early March. Liffe July cocoa futures fell 16 pounds, or 1.1 percent, to finish at 1,436 pounds. 

Copyright Reuters, 2013

Muhammad Ramzan Rafique
Muhammad Ramzan Rafique

I am from a small town Chichawatni, Sahiwal, Punjab , Pakistan, studied from University of Agriculture Faisalabad, on my mission to explore world I am in Denmark these days..

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