April 30, 2020 / 12:02 PM / a month ago

SOFTS-Raw sugar surges as crude oil and global equities gain

LONDON, April 30 (Reuters) - ICE raw sugar futures rose sharply on Thursday, extending the previous session’s gains as crude oil prices rose for a second day and global stock markets were buoyed by encouraging early results from a COVID-19 treatment trial.

Coffee and cocoa also rose.

SUGAR

* May raw sugar, which expires later this session, was up ​​0.3 cents, or 2.7%, at 10.02 cents per lb at 1149 GMT, extending Wednesday’s 4.5% gains and moving further away from this week’s 12-1/2 year low.

* There remains potential for a large delivery at expiry. The open interest as of Wednesday was about 50,000 lots, equating to around 2.6 million tonnes.

* July raw sugar, where most of the traded volume is, rose 0.3 cents, or 2.9 %, to 10.21 cents per lb.

* Oil prices surged on early signs of a pick-up in global fuel demand. Stronger energy prices tend to discourage Brazilian cane mills from ramping up sugar output at the expense of ethanol, a cane-based biofuel.

* “Fecombustiveis reported slightly higher ethanol sales last week. The sugar market’s belief that reopening, and a recovery in fuel demand, would occur in time to prevent too much sugar production had been waning. Now the possibility seems more vivid again,” Commonwealth Bank of Australia said in a note.

* But dealers said that sugar prices are likely to be capped by the uncertainty surrounding the coronavirus pandemic, pointing to persisting concerns that recent sharp energy price falls will mean Brazil produces excess sugar this season.

* Sugar output in Brazil’s centre-south region increased by 178% year on year in the first half of April, data showed on Wednesday.

* August white sugar rose $8.90, or 2.7%, to $330.10 a tonne.

COFFEE

* July arabica coffee rose 0.5 cents, or 0.4%, to $1.0575 per lb, having hit a one-month low of $1.0590 on both Monday and Tuesday.

* The prospect of a large harvest in Brazil this year remains a bearish factor, along with weakness for the Brazilian real, which raises the value of dollar-priced coffee exports in local currency terms.

* The decline in ICE certified coffee stocks since late January has petered out, meanwhile. KC-TOT-TOT

* July robusta coffee rose $3, or 0.3%, to $1,189 a tonne.

* Commerzbank said the market was shrugging off government data from Vietnam, the world’s top robusta producer, showing that coffee exports in the first four months are likely to have risen 4.5% from a year earlier, expecting it to be revised lower.

COCOA

* July New York cocoa was up $4, or 0.2%, at $2,381 a tonne.

* The global cocoa market remains concerned about the impact of the coronavirus pandemic on demand after poor first-quarter grinding data, though there are signs also of falling output in top producer Ivory Coast.

* July London cocoa fell 6 pounds, or 0.3%, to 1,919 pounds a tonne​. (Editing by David Goodman)

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