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IKAR in Mass Media

SOFTS-Sugar fights back from sell-off, cocoa sinks

10 сентября 2010 года

NEW YORK/LONDON, (Reuters) - Sugar futures charged higher Tuesday on technical buying, with raws climbing over5.0 percent after sinking to a three-week low in the previous session, analysts said.

The sweetener was propped up in part by the prospect of further offtake from Pakistan, which had already bought 205,000 tonnes of white sugar. A fall in beet sugar output by Russia due to a withering drought also supported sugar.

Cocoa futures, on the other hand, sank on all-around liquidation while coffee futures were mixed at the close.

New York's key October raw sugar contract increased 0.83 cent or by 4.68 percent to end at 18.56 cents a lb. On Monday, the contract dropped 0.51 cent to close at 17.73 cents in the lowest settlement close for the spot raw sugar contract since July 21.

London's October white sugar contract added $10.60 to end at $534.70 a tonne. "A lot of investors and speculators jumped right back in," said James Cordier, an analyst at brokers optionsellers.com in Florida.

After rallying to a 5-month top of 19.88 cents on Aug. 2, raw sugar has lost 11.92 percent in value to hit a three-week intra-day low of 17.51 cents on Tuesday.

Cordier said the market was plainly oversold and due for a bounce.

A supportive factor for sugar is the drought which may cut Russia's white sugar refining volume from this year's crop to 2.8 million tonnes from 3.2 million a year earlier, according to the Institute for Agricultural Market Studies (IKAR).

"Russia is in deficit and anything it loses, means that it imports more from the world market," James Kirkup, director and head of sugar brokerage at ABN AMRO Markets (UK) Ltd., said.

Russia is one of the world's largest sugar buyers and Russia's sugar lobby said it expects the country's 2011 sugar imports to be equal to 2010.

COCOA SINKS AND COFFEE MIXED

Cocoa futures were hit by long liquidation, with dealers pointing to talk independent analyst Hans Kilian released a report raising the output forecast for No. 2 cocoa producer Ghana, saying it had contributed to the fall in futures.

U.S. cocoa futures broke through critical support at $2,900 per tonne, basis September, triggering automatic sell-stops.

"I think it's likely to keep moving to the downside," said Jim Goens, market strategist with LaSalle Futures Group in Chicago.

London's December cocoa futures slid 60 pounds to end at 2,051 pounds per tonne. New York's December cocoa contract dropped $109 or by 3.59 percent to close at $2,930 per tonne.

The nearby premium on Liffe September cocoa ended on Tuesday at 72 pounds, from Monday's 74 pounds.

Coffee futures were mixed, with arabica futures seeing September/December spreading dominate the moderate volume in the market. The slightly widening spread was a near-term bearish indicator, said Goens.

New York's September arabica contract added 0.05 cent to conclude at $1.6965 a lb. London's November robusta contract fell $18 to finish at $1,732 per tonne.

The European Coffee Federation estimates European coffee stocks at about 10.35 million 60-kilogram bags as at the end of June, up 20,128 bags on the month.

This is the first increase in stocks this year, following months of roasters drawing down European warehouse stocks due to delays and defaults in Vietnam and a disappointing Colombian crop.

The ECF's figures include both LIFFE and ICE certified stocks as well as non-exchange stocks held in warehouses at major coffee storage ports in Europe.

Source: Reuters  |  #sugar   |  Comments: 0   Views: 73

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