Sugar prices are little changed Monday as traders took a breather after a wild week and awaited the release of the latest data for the key producing region in Brazil.
Raw sugar for March delivery edged up 0.1% to settle at 14.00 cents a pound on the ICE Futures U.S. exchange.
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Sugar suffered a nearly 3% loss on Friday as short sellers doubled down on their bearish bets as prices slid. The price drop also reflected a stronger dollar, as traders seized on the fact that average weekly earnings in the U.S. rose more than expected in the September jobs report, which could support another increase in Fed Fund rates before the end of the year.
Prices somewhat stabilized on Monday, in part due to the bullish Commitment of Traders report, which showed that non-index funds had increased their net short position to 106,000 lots. As of Oct. 3, total outstanding contracts in the New York raw sugar market dropped to the lowest level since Dec. 2011, according to Sucden Financial Research.
Analysts at Societe Generale noted in their latest Commodity Compass report that sugar is oversold and "vulnerable to short covering."
UNICA, Brazil's cane sugar association, is expected to release its latest crushing activity report early this week. Traders are closely monitoring whether the sugar millers in central-south region would direct more cane crushing toward ethanol over sugar, as the ethanol premium has increased over sugar in recent weeks.
"This is probably the only factor in the 'plus' column for sugar right now," said Nick Penney, senior trader at Sucden Financial Research, in a note to clients.
In other markets, orange juice for November was up 0.2% to settle at $1.5750 a pound; cocoa for December fell 3.7% to $2,008 a ton; arabica coffee for December added 0.7% to $1.3095 a pound; and December cotton was up 0.2% to settle at 68.95 cents a pound.
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(END) Dow Jones Newswires
October 09, 2017 14:46 ET (18:46 GMT)