Soft commodities watch: Sugar price hits three-week peak
Soft commodity futures have been trading in positive territory so far in today’s session, with raw sugar prices reaching a three-week high on supply concerns. Meanwhile, arabica, coffee and grains have all edged up on a softening US dollar.
Raw sugar futures climbed on concerns regarding limited supplies before the beginning of the cane harvest in centre-south Brazil this month. ICE Raw sugar futures for settlement in May had appreciated 1.41 percent to 12.96 cents per lb as of 13:53 BST. The benchmark was trading at the strongest level for a front month contract since March 18. The futures contract has rebounded 8.64 percent after hitting a six-year low of 11.91 cents last week.
Today, Reuters cited Tracey Allen, commodity analyst with Rabobank, as saying: “There is tighter availability for prompt shipment, and we’re seeing more short covering”. She also noted that rains in major cane-growing areas in Brazil may delay the start of harvesting in some areas by around a week. At last check, front month white sugar futures had gained nearly one percent to $370.500 per tonne.
The dollar-denominated softs complex has found tailwind on a weakening greenback. As of 13:11 BST, the DXY dollar index, which pegs the US currency versus six of its peers, was at 97.4260, down 0.41 percent intraday.
Arabica coffee futures for delivery in May had climbed 1.06 percent to $1.434 as of 13:30 BST. The benchmark was trading close to the two-month high of $1.4735 hit earlier in the week. The commodity was supported by a three percent year-on-year drop in production from Columbia. At last check, London May robusta coffee had gained 0.11 percent at $1,808.00 a tonne.
Cocoa for May delivery had gained 0.62 percent higher at £1,938.00 per tonne in London. Meanwhile, the US benchmark had rallied 1.67 percent to $2,832.50 in New York.
In grains, the soybeans futures were trading in positive territory for the first time in nearly a week on concerns over supply disruptions from Brazil, though gains were restrained by ample global supplies. The front-month soybeans contract had gained 0.11 percent to $9.722 per bushel on the Chicago Board of Trade (CBOT) as of 13:43 BST, trimming yesterday’s 0.77 percent drop.
CBOT wheat futures for May delivery were trading near yesterday’s closing price, up 0.03 percent to $5.263 per bushel as of 13:44 BST, following a 0.32 percent decline during the previous session. The front-month corn contract had shed 0.06 percent of its value to $3.833 a bushel.
Agricultural commodities traders will now be eyeing the release of the monthly world agricultural supply and demand estimates report from the US Department of Agriculture, due tomorrow, for further cues on market movements.