Sugar Contract Expires Higher as Firms Take 1.8 Million Ton Delivery

By Julie Wernau Features Dow Jones Newswires

Raw sugar futures ended higher as three firms took delivery of nearly 1.8 million tons of sugar on the last trading day of the July contract.

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Raw sugar for July ended up 2.3%, at 13.81 cents a pound, on the ICE Futures U.S. exchange.

Buyers were commodities merchant ED&F Man, Bunge Ltd., and Wilmar, which has consistently taken delivery off the exchange since 2015. Five firms were delivers: Cofco International was set to deliver the bulk of the sugar with Louis Dreyfus Commodities, Alvean, Olam and Czarnikow delivering the rest.

Sugar prices have steadily declined since February and fell to the lowest levels in 16 months on Wednesday, on concerns about oversupply. Commerzbank said Friday that it expects supply to grow considerably in nearly all important producer countries. They expect sugar prices to top out at 14 cents a pound in the fourth quarter.

In May, five companies took delivery of 1.5 million tons of sugar at the expiration of the May contract. Wilmar, has taken 6.6 million tons of sugar since 2015.

The moves by Wilmar have confounded other players in the market who have said the play is either a bet to drive up prices by inciting demand or a strategy for snatching up cheap sugar.

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"They've got to put it somewhere. That's an awful lot of Coca-Cola," said Jack Scoville, vice president of Price Futures Group in Chicago.

Mr. Scoville described the scope of the sugar deliveries in terms of China, which imported 300,000 ton of a sugar a month at its high. He said those who delivered sugar today likely were able to profit off of futures positions they placed when prices were higher.

In other markets, cocoa for September was up 4.3%, to end at $1,940 a ton; arabica coffee for September fell 0.5%, to settle at $1.257 a pound; frozen concentrated orange juice for September was off 1%, at $1.3255 a pound; and December cotton rose 2%, to end at 68.59 cents a pound.

Write to Julie Wernau at julie.wernau@wsj.com

(END) Dow Jones Newswires

June 30, 2017 15:11 ET (19:11 GMT)