May 6, 2020 / 12:22 PM / 24 days ago

SOFTS-Raw sugar prices dip but look to establish floor as oil recovers

LONDON, May 6 (Reuters) - ICE raw sugar futures fell on Wednesday following sharp gains in the previous session, with the market looking to establish a floor given the tentative recovery in crude oil prices.

Coffee and cocoa also fell.


* July raw sugar was down 0.1 cents, or 1.1%, to 10.66 cents per lb at 1151 GMT, having closed up 3.7% on Tuesday. The contract hit a 12-1/2-year low last week.

* Oil rose above $31 a barrel, with hopes for a recovery in demand as some countries ease coronavirus lockdowns offsetting a higher-than-expected rise in U.S. inventories.

* Rising energy prices tend to discourage Brazilian cane mills from ramping up sugar output at the expense of ethanol, a cane-based biofuel.

* “The raw sugar market continues to be largely influenced by the macro so unless there is any serious deterioration, sugar should hold above 10.40/50, aided by the firm London (white sugar) market.” said a dealer.

* He added, however: “Any major push higher would seem unlikely as uncertainty continues to haunt the world.”

* Brazil is expected to produce 35.3 million tonnes of sugar in the 2020-21 season (April-March), 18.5% more than in the previous crop, as mills allocate more cane to make sugar versus ethanol, official projections show.

* August white sugar was down $4.40, or 1.3%, to $353.40 a tonne, having closed up 4.6% on Tuesday after hitting a one-month high.


* July arabica coffee fell 1 cent, or 0.9%, to $1.0970 per lb, having hit its lowest in nearly 1-1/2 months last week.

* Colombia produced 744,000 60-kg bags of washed arabica coffee in April, down 28% from a year ago, with April coffee exports down 32% to 592,000 bags. The output and exports fell due to coronavirus lockdown restrictions.

* A dealer said he was still bullish coffee, with talk that Brazilian producers, tempted by the weak real, have already sold some 35-45% of the 20/21 crop, a factor that limits how much selling they can do going forward.

* However, coffee consumption could fall by 1.5-2 million bags this season due to coronavirus lockdowns, he said.

* The International Coffee Organization sees the global coffee market flipping into a 1.95 million 60kg bag surplus in the 2019/20 season due to the impact of coronavirus lockdowns, having previously forecast a 474,000 bag deficit.

* July robusta coffee fell $3, or 0.3%, to $1,197 a tonne.


* July New York cocoa was down $26, or 1.1%, at $2,352 a tonne.

* Dealers said cocoa would likely be driven medium term by demand destruction linked to the coronavirus pandemic and to Ivory Coast and Ghana’s ‘living income’ premium, which has inflated cocoa purchasing costs and deterred buying.

* There have been some worries dry, hot weather could hit mid-crop output in West Africa, though trader Rockwinds said in a note the weather situation is “nowhere near as dramatic as one might fear following the relatively dry April”.

* July New York cocoa may fall to $2,339 per tonne, as it has broken a support at $2,369, technical signals indicate.

* July London cocoa fell 10 pounds, or 0.5%, to 1,895 pounds a tonne​.

Reporting by Maytaal Angel; Editing by Kirsten Donovan

Nuestros Estándares:Los principios Thomson Reuters
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below