Raw sugar futures jumped Thursday, helped along by generally positive sentiment from outside markets.
Raw sugar for October was up 3.5% to end at 14.40 cents a pound on the ICE Futures U.S. exchange.
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James Liddiard at Agrilion Commodity Advisers said in a note that with crude prices rising, most agricultural commodities higher on the day and the Brazilian real rising against the dollar, sugar futures are seeing a boost.
Brazil is the world's largest producer of sweetener, and sugarcane producers there have a tendency to convert more cane to ethanol rather than sugar when they think they will be able to fetch higher prices for fuel. Since Hurricane Harvey made landfall on Friday, the storm has knocked out about a third of U.S. refining capacity, and fuel and crude prices have surged.
At the same time, a stronger real against the dollar tends to make producers hold back on sales of dollar-denominated goods like sugar until a more favorable exchange rate allows them to convert dollar sales into more of Brazil's local currency.
"The market expects firmer prices over time as Brazil looks ready to produce more ethanol and less sugar," said Jack Scoville, vice president of Price Futures Group in Chicago, who noted that more favorable taxes for ethanol in Brazil are aiding that sentiment.
In other markets, cocoa for December was up 0.1% to close at $1,926 a ton, arabica coffee for December rose 0.9% to settle at $1.2935 a pound, frozen concentrated orange juice for November was up 2.9% to end at $1.338 a pound and December cotton edged up 0.1% to settle at 70.93 cents a pound.
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(END) Dow Jones Newswires
August 31, 2017 18:03 ET (22:03 GMT)