Soft commodities round-up: Sugar price lingers near six-year low
Soft commodity futures have been trading mixed so far in today’s European session. Raw sugar futures are currently hovering above the six-year intraday low hit during the previous session, weighed by both abundant supply and weakness in the Brazilian real, while arabica coffee is trading higher. Cocoa has seen limited change as a weaker dollar underpinned futures in New York.
Sugar futures for May delivery were down 0.8 percent, or 0.1 cents, to 12.42 cents per lb on the ICE exchange as of 13:40 GMT. The contract was changing hands near the six-year low of 12.31 cents hit during the previous session.
Meanwhile, at last check sugar traded 0.56 percent lower at £362.10 per tonne in London. The soft commodity has been weighed by a weak Brazilian currency, as producers in the country sold dollar-denominated sweetener to secure local currency returns.
May US coffee C futures were up 0.59 percent, at $1.4043 per lb as of 14:03 GMT. The contract jumped four percent during the previous session following the release of a report forecasting a drop in supplies in top grower Brazil.
According to yesterday’s report from INTL FCStone Brazil will harvest between 44 million to 45.5 million 60-kg bags this year, down from 48 million to 49 million bags. Reuters quoted Myrto Sokou, senior research analyst with Sucden Financial, as saying: “Short-term indicators suggest the potential for modest gains towards the 40-day moving average of $1.4896 and the $1.50 area”. Brazil suffered an unprecedented drought during the previous year, which reduced coffee production and stunted tree branch growth for the upcoming 2015/16 crop.
Cocoa for May delivery rose 0.15 percent to £1,953.00 per tonne in London, while the US benchmark was up 0.07 percent at $2,777.00 a tonne. According to a London-based broker cited by Reuters, currency movement are seen as “a driver for New York futures”. Earlier today, sterling reached its highest point in a week versus the greenback following a robust British sales report.