Raw sugar futures gained Thursday as traders awaited the release of cane crush data for the key producing region in Brazil.
Sugar futures for October delivery added 1.5% to 13.87 cents a pound on the ICE Futures U.S. exchange.
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Though sugar prices have bounced off their recent lows, analysts noted that the market was contained in narrow price moves and thin trading volumes.
"The summer doldrums continue and the market needs to break upward north of 14.00/14.10 before encouraging covering of recent shorts," wrote Nick Penney, senior trader at Sucden Financial Research.
Traders were eyeing on the next report by the Brazilian cane industry UNICA, which could provide a catalyst for a correction to the upside, Mr. Penney wrote in the note.
A survey of analysts by S&P Global Platts showed that Brazil's Center-South in the first half of August crushed a total of 46.35 million tons of sugarcane, up 2.7% on the year. That volume would be down 9% from the two weeks prior, when a record 50.74 million tons was crushed.
Sugar production was estimated by the analysts to be at 3.156 million tons, according to S&P Platts, a 5.9% increase from a year earlier.
However, analysts and traders were still skeptical if any price rally could sustain, as the sugar glut is seen to be larger than expected.
Green Pool has reduced its forecast of the 2016-17 deficit to 2.078 million tons from 5.5 million tons at the end of January, while its 2017-18 surplus has gone from 4.37 million tons at the end of Jan to 7.1 million tons, helped by better production forecasts for CS Brazil, Thailand and EU, said James Liddiard, an analyst with Agrilion Commodity Advisers.
"The danger is that the market may be getting too obsessed with the progress of the Brazil crop and lose sight of what is happening elsewhere," Mr. Penney wrote.
In other markets, cocoa for December added 0.3% to $1,877 a ton, arabica coffee for December delivery dropped 1% to $1.2740 a pound, frozen concentrated orange juice for November was up 1.4% to $1.3675 a pound and cotton gained 0.1% to 68.97 cents a pound.
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(END) Dow Jones Newswires
August 24, 2017 11:30 ET (15:30 GMT)