March 19th, 2012

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.

Continue reading »

March 5th, 2012

Commodity Brokers – Speculators increased bets on higher agricultural prices to a five-month high on mounting concern that a South American drought will curb supplies of soybeans, corn and sugar at a time of record global demand.

A measure of speculative positions across 11 farm goods jumped 26 percent to 607,721 futures and options in the week ended Feb. 28, U.S. Commodity Futures Trading Commission data show. Corn bets increased the most in eight weeks, and sugar holdings climbed to the highest since August. Wagers on higher soybean prices rose to a five-month high.

Hedge funds and other speculators are the most bullish on commodities since September as sanctions on Iran over its nuclear program disrupt oil supplies and weather damages crops in South America. Producers were already struggling to keep up with demand from a global population that surpassed 7 billion people last year, with consumption now boosted by signs that economic growth is accelerating.

“Weather and the perception of damages to supply” have pushed prices higher, said Osvaldo Canavosio, the New York-based head of emerging markets and commodities research at Man Investments USA LLC, which manages about $11.2 billion of assets. “There’s been a continuing pattern of the rest of the world outside the U.S. being an important driver of supply-and- demand dynamics.”

Continue reading »

February 28th, 2012

Sugar Futures: Raw sugar may drop to less than 20 cents a pound by year-end as global supply exceeds demand for a second season in 2012-2013, according to F.O. Licht GmbH, which said that lower prices may spur restocking by importers. The commodity dropped for the first time in nine days in New York.

The surplus may counter support that sugar gets from higher oil prices, according to Christoph Berg, managing director at the Ratzeburg, Germany-based researcher who’s covered the market since 1994. Sugar, which hasn’t traded below 20 cents since September 2010, snapped the best run since November of that year.

Lower prices would cut expenses for users such as soft- drinks maker Coca-Cola Co. (KO), which has also predicted global surpluses, while helping to extend a decline in world food costs. Sugar may trade between 20 cents and 25 cents on rising supply in the Northern Hemisphere and prospects for a good 2012-2013 crop in Brazil, HSBC Holdings Plc said in a report on Feb. 17.

“We currently see a fair price, possibly some weakness in the second half,” Berg said in a phone interview before an industry conference that began in Bangkok today. “We’re talking more about sugar prices falling to 20 cents, possibly below.”

Raw sugar on ICE Futures U.S. lost 27 percent in 2011, the biggest drop in a decade, as traders sold the commodity on anticipation of a second surplus after three shortages. The May- delivery contract declined as much as 0.7 percent to 25.36 cents today, dropping from the highest level in more than three months. The price was at 25.50 cents at 9:43 a.m. in London.

Continue reading »

February 24th, 2012

Sugar futures rose for the seventh straight session, heading for the longest rally in 15 months, on signs of tight supplies, as demand remains robust. Coffee and cocoa also advanced.

Sugar output in Mexico, the world’s sixth-largest producer, may miss a government forecast as adverse weather threatens crops, Newedge Group said yesterday in an e-mailed report. Brazil’s Center South, the top producing region, produced 6.8 percent less sugar this year, Unica, an industry association has said.

“There is talk of a near-term shortage due to the slow pace of the Mexican harvest,” Jack Scoville, a vice president for Price Futures Group in Chicago said in an e-mailed report. There’s also concern that Brazil’s crop may not recover, “due to poor weather,” he said.

Sugar futures raw for May delivery gained 1.5 percent to 25.23 cents a pound at 11:28 a.m. on ICE Futures U.S. in New York, heading for the longest rally since November 2010. Earlier, the price touched 25.24 cents, the highest for a most active contract since Nov. 14.

The Dollar Index, a measure of the greenback against six major currencies, fell to a 10-week low, enhancing the appeal of commodities as alternative assets. The Standard & Poor’s GSCI Spot Index of 24 raw materials touched an eight-month high.

Arabica-coffee futures for May delivery rose 0.9 percent to $2.0385 a pound in New York. Before today, the price tumbled 11 percent this year.

Continue reading »