Bloomberg News

Sugar Swings in New York on Delivery Speculation; Cocoa Stable

May 01, 2013

Sugar swung between gains and losses on ICE Futures U.S. in New York as traders weighed forecasts for ample supplies and speculation that the amount of sweetener to be delivered via the exchange will be bigger than expected. Cocoa and coffee were little changed.

Raw sugar delivered to the expired May futures contract will probably be about 1.4 million metric tons, said Fabienne Pointier, an analyst at Lausanne, Switzerland-based researcher Kingsman SA, owned by McGraw-Hill Cos. The contract expired yesterday and ICE will publish the official figures today. Sugar rebounded from a technical support at the 17.20-17.25 cents a pound area, said Julien Benichou, a broker at Starsupply Renewables in Nyon, Switzerland. Producers will probably start to sell from 17.70 cents upward, he said.

“Most of us are surprised by the size of the delivery, which will probably be bigger than thought,” Kingsman’s Pointier said. “The quantity is likely to be bigger than what Brazil has already produced, so it will be interesting to see how it plays out with the logistical constraints there.”

Raw sugar for delivery in July fell as much as 0.1 percent to 17.58 cents a pound by 6:33 a.m. on ICE, after rising as much as 0.5 percent earlier today. Trading volume was 66 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed. White, or refined, sugar for delivery in August rose 0.2 percent to $506.10 a ton on NYSE Liffe in London.

Sugar production in Brazil’s center south, the main producing region of the world’s biggest producer, reached 237,000 tons in the first half of April, according to data from industry group Unica. That is up from the 152,000 tons produced in the same period last year. Harvesting in the area began this month and rains delayed plans for an early start. Output will be a record 35.5 million tons this year, Unica estimates.

Brazil Logistics

Record soybean and sugar-cane crops and a large corn harvest in Brazil may generate logistical constraints on transporting the commodities to ports. Potential delays to the U.S. corn harvest may keep “loading firmly entrenched in Brazil for a bit longer than expected, and that could complicate transport of sugar to the port,” Michael McDougall, a vice president for Newedge Group in New York, said in an e-mailed report yesterday.

Cocoa for July delivery was little changed at $2,370 a ton in New York. Cocoa for delivery the same month was unchanged at 1,541 pounds ($2,399) a ton in London.

Arabica coffee futures for July delivery were little changed at $1.3495 a pound on ICE. Robusta coffee futures for delivery in July were down 0.1 percent at $2,005 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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