Raw sugar futures rose on the last day of trading for the July contract. Traders were anticipating another big buyer could take delivery of sugar against the exchange.
Some trade houses that were poised to deliver the sweetener appeared to have had a change of heart two days before the expiration of the July contract, which has risen by a cent in two days.
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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, which has taken 6 million tons of sugar since 2015, took another half a million tons as the May contract expired.
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.
"Given the recent May delivery was 1.5 million tons, there is a potential for the July delivery to be much larger," Michael McDougall at Societe Generale said in a note to clients.
He pointed to large open interest in the July contract, which yesterday was 47.5% larger than during the May delivery, he said.
In other markets, cocoa for September was up 4.7% at $1,948 a ton, arabica coffee for September fell 0.5% to $1.257 a pound, frozen concentrated orange juice for September was up 0.8% at $1.35 a pound and December cotton lost 0.2% to 67.10 cents a pound.
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(END) Dow Jones Newswires
June 30, 2017 11:10 ET (15:10 GMT)