BRASÍLIA: Raw sugar futures on ICE rallied more than 3 percent on a late-day buying spree for the second straight session on Friday, lifting prices well above the key 20-cents-per-lb level to the highest in more than three weeks. Cocoa futures also extended their gains, closing the week up more than 5 percent as chart-based signals strengthened, while arabica coffee came off its highs as the currency in top grower Brazil pared gains.
The Brazilian real climbed to its strongest level against the dollar in more than a year before the greenback recovered some ground following the release of a robust U.S. jobs report. Dealers said a rise in the real made sales less attractive to local producers and should slow exports from the world’s to supplier of both sugar and coffee. October raws extended the prior session’s 3.5 percent rally and settled up 0.65 cent, or 3.3 percent, at 20.35 cents per lb. They saw their strongest weekly performance in five. “There has been no further development in the fundamentals to justify this move, at least in the short term,” said Sucden Financial senior trader Nick Penney.
“CS (Center-South) Brazil is into maximum crush mode, enjoying good dry weather and maximizing sugar production given its continuing price advantage over ethanol.” October whites settled up $8.70, or 1.6 percent, at $551.40 per tonne. Cocoa futures firmed, underpinned by tightening supplies with a large global deficit widely forecast for the current 2015-16 (October/September) season. The New York market found additional strength from technical buy signals, after briefly rising above its 50-day moving average and key Fibonacci retracement level, traders said.
September New York cocoa settled up $30, or 1 percent, at $3,021 per tonne after rising to $3,041, its highest since July 19. It finished the week up 6.6 percent, its strongest since late April, as September options expired at the end of the session. September London cocoa settled up 16 pounds, or 0.7 percent, at 2,420 pounds per tonne. It closed the week up 5.4 percent, its first one higher in four.
Arabica coffee futures slightly extended the prior session’s gains as the market rebounded further from a 5-1/2 week low hit on Thursday. September arabica settled up 0.4 cent, or 0.3 percent, at $1.425 per lb. Robusta coffee futures were also firm with September ending up $6, or 0.3 percent, at $1,823 per tonne. Dealers said robusta remained supported by a slowdown in the pace of exports from both Vietnam and Indonesia.
