May 11, 2015
Sugaronline | http://goo.gl/KWt2se
Raw sugar futures surged the most in four months on Friday on short-covering and a stronger Brazilian real, which erodes incentives for producers in the world's largest exporter to sell dollar-denominated sweetener, according to Reuters.
July raw sugar futures on ICE rallied as much as 3.7% to a one-week high of 13.44 before settling up 0.46 cents, or 3.5%, to 13.42 cents a lb.
The real rose sharply against the dollar in Friday's trade, lifting prices of both sugar and arabica coffee. The stronger currency tends to reduce selling in the world's largest producer of both commodities.
"The currency is helping, and there are some speculators that got caught short as we broke technical levels to the upside," said Bruno Lima, manager for sugar and ethanol at INTL FCStone in Campinas, Brazil.
The rallies left raw sugar futures with their biggest weekly gain since early April in the week following the largest delivery against the ICE raw futures contract on record and came as traders prepared for next week's Sugar Week in New York.
ICE August white sugar futures gained US$7.20, or 1.9%, to settle at US$382.70 a tonne.
Traders also focused on rains during the early period of the cane crush in top grower Brazil, which have encouraged mills to raise cane allocations to ethanol biofuel instead of sugar. The strong pace of early nominations of vessels against the record May contract expiry suggested a large amount of the sweetener will be exported in the near term.