Soft commodities watch: Sugar price hits fresh six year low
Soft commodity futures have been trading in negative territory so far in today’s session with a rallying US dollar weighing on prices across the commodity sector. US wheat has been the only notable exception as it rebounded from steep losses incurred earlier during the week. Raw sugar futures have hit a fresh six-year low, while arabica coffee and cocoa also headed south.
Raw sugar futures for May delivery had shed nearly one percent of their value to 12.38 cents per lb on the ICE exchange as of 14:31 GMT. The contract fell as low as 12.22 cents in earlier trading, its weakest level since April 2009. The soft commodity suffered heavy downward pressure as the US dollar rallied versus its major peers amid ample supplies and stocks.
“The dollar is working against the sugar market, and the supply side is particularly heavy,” said Tracey Allen, commodity analyst with Rabobank, as cited by Reuters. Meanwhile, at last check sugar traded 0.43 percent lower at £362.60 per tonne in London.
Arabica futures for May settlement were down nearly two cents, or 1.34 percent, at $1.382 per lb, above the 13-month low of $1.2875 per lb hit earlier this month. May robusta coffee was down $20 or 1.11 percent to $1,796 a tonne.
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Cocoa for May delivery declined about one percent to £1,922.00 per tonne in London, while the US benchmark was down 0.38 percent at $2,743.00 a tonne, pressured by an appreciating pound versus the dollar.
In grain market trading, US wheat rebounded modestly, following its steepest drop in over eight months yesterday. Wheat futures for delivery in May on the Chicago Board of Trade were 0.44 percent up at $5.014 a bushel, trimming yesterday’s 3.8 percent drop, the contract’s biggest one-day fall since July 2014. Wheat is set for a 5.5 percent intraweek drop amid favourable weather forecasts.
Soybean prices have declined for a fourth consecutive day on the back of expectations for a bumper South American crop. May soybeans were down 0.41 percent at $9.703 per bushel, having closed 0.43 percent lower in the previous session.
Meanwhile, corn prices were trading near yesterday’s closing level at 3.913 a bushel, following yesterday’s nearly one percent drop. The commodity remains on course for a 1.35 percent weekly gain, tracking the rally in crude oil prices. Markets will be eyeing the release of Tuesday’s report on grain stocks from the US Department of Agriculture for further cues on market movements.