Sugar Losses Slowed by Oil Rally
Sugar futures recouped some of the day's losses Tuesday, helped along by a rally in crude oil prices.
Raw sugar for March ended down 0.3% at 14.73 cents a pound on the ICE Futures U.S. exchange, after falling as low as 14.42 cents a pound in earlier trade.
When fuel prices rise, that leads some traders to push up bullish bets for sugar on the expectation that producers will increase fuel production from cane over ethanol production.
But the bulls were up against lackluster demand for sugar along with disappointed index fund buying, said Michael McDougall, senior vice president of sales at ED&F Man Capital Markets.
Mr. McDougall said the market initially believed 63,000 contracts were on the docket for index fund buyers this week but now the figure is looking closer to 38,000 lots.
While sugar exports for Brazil, the world's largest producer of sweetener, are up for the crop year through December, ED&F Man says that flow has dropped off over the last two months, with exports over November and December at 4.1 million tons, about 1.1 million tons lower than the same period last year.
In other markets, cocoa for March was down 0.8% to end at $1,899 a ton, arabica coffee for March ended flat at $1.2515 a pound, frozen concentrated orange juice for March lost 1.6% to settle at $1.3645 a pound and March cotton rose 0.3% to end at 78.35 cents a pound.
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(END) Dow Jones Newswires
January 09, 2018 17:05 ET (22:05 GMT)