Bloomberg News

Sugar Reaches Two-Week High on Record Bearish Bets; Coffee Rose

February 25, 2013

Sugar climbed to the highest level in almost two weeks in New York as investors bought the futures after bets on lower prices reached a record just as port strikes in top-grower Brazil threaten to delay shipments. Coffee advanced.

Large and small speculators excluding index funds were net- short, or betting on lower prices, by about 103,000 contracts in the week ended Feb. 19, according to U.S. Commodity Futures Trading Commission data compiled by Bloomberg. Dock workers in Brazil are considering a strike that would disrupt commodity shipments. A record 192 vessels were waiting to load 10.8 million metric tons of soybeans, corn, wheat and rice at the end of last week, compared with 90 ships waiting to load 4.1 million tons a year earlier, according to SA Commodities in Santos, Brazil.

“Speculators are net short over 100,000 lots, which is massive,” Julien Benichou, an agriculture derivatives broker at Starsupply Renewables SA in Nyon, Switzerland, said today by e- mail. “We think we can test the 18.45 cents to 18.65 cents if we have a big short-covering rally. On top of that grains logistical delay and potential strikes are not helping.”

Raw sugar for May delivery gained 1.6 percent to 18.43 cents a pound by 6:01 a.m. on ICE Futures U.S. in New York, after touching 18.44 cents a pound, the highest since Feb. 12. Trading volume was more than double the average of the past 100 days for this time of the day, according to figures compiled by Bloomberg. White sugar for May delivery advanced 1.1 percent to $510.80 a ton on NYSE Liffe in London.

Brazil’s government is weighing a proposed port investment bill to avert a strike that could hurt trade in Latin America’s largest economy, Ports Minister Leonidas Cristino said last week. Union leaders agreed to cancel a second six-hour stoppage scheduled for tomorrow and a meeting was slated for March 1, Cristino said.

Price Difference

Raw sugar for March delivery was 0.05 cent a pound more expensive than the sweetener for May. The price difference between the two futures contracts is down from 0.26 cent a pound on Feb. 19, data on Bloomberg showed. The March futures expire on Feb. 28 and ICE will announce the delivery on March 1.

Cocoa for delivery in May fell 0.2 percent to $2,134 a ton in New York. Cocoa for delivery in March gained 0.5 percent to 1,431 pounds ($2,168) a ton in London.

Arabica coffee for delivery in May rose 0.4 percent to $1.4435 a pound on ICE. Robusta coffee for delivery in May climbed 0.3 percent to $2,094 a ton on NYSE Liffe.

To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.


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