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Sugar futures climbed to a three- week high on speculation that output will trail forecasts in Brazil, the world’s top producer. Coffee and cocoa advanced.
Copersucar SA, Brazil’s biggest sugar-trading and producers’ cooperative, said last week that production in the Center South, the main growing region, may be 32 million metric tons in the season that starts in April, down from a forecast of as much as 34 million tons in February, after drought damaged crops.
“The market is beginning to believe there might be an ‘issue’ with the health of the Center South crop in Brazil and adjusts its trading range accordingly,” Michael McDougall, a senior vice president at Newedge Group in New York, said in a report.
Raw sugar for May delivery advanced 1 percent to close at 25.66 cents a pound at 1:44 p.m. on ICE Futures U.S. in New York. Earlier, the price reached 25.71 cents, the highest for a most-active contract since Feb. 27.
Investors were “expecting a large global surplus to weigh on the market in the late second and early third quarters, but much of this surplus will depend upon a better production level from Brazil, and this is beginning to look less likely,” McDougall said.
Cocoa futures for May delivery rose 1.5 percent to $2,289 a ton in New York.
Arabica-coffee futures for May delivery increased 0.6 percent to $1.835 a pound on ICE.
In London futures trading, refined sugar and cocoa gained on NYSE Liffe, and robusta coffee slid.
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