Sugar futures rose in thin trade Wednesday in the absence of fresh news to move prices either way.
Raw sugar futures for March delivery added 0.4% to settle at 14.08 cents a pound on the ICE Futures U.S. exchange.
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Prices remained well anchored and within the tight range they have been trading in for the past two months, reflecting a market that has been consumed by bearish sentiment and few new fundamental developments.
Sugar is the worst-performing commodity so far this year, largely weighed down by record supplies from Brazil, the European Union and other major producers. With prices drifting lower and lower, sugar users have gradually bought in the futures market and covered the majority of their future needs. On the other hand, producers have been waiting on the sidelines for any price increases to hedge their production.
As of now, sugar mills in central-south Brazil have only hedged 15% of their production for the next crop year, compared with 34%-35% at the same time last year, according to Bruno Lima, head of sugar and ethanol at INTL FCStone in Brazil.
Commercials as a group held a net short position of 90,000 lots in the latest weekly report, less than half of their historical average position, according to Commodity Futures Trading Commission.
Speculators in the sugar market also showed signs of fatigue, currently running at a short position of 103,000 lots, which represented a slight decline from their record short of 130,000 lots, according to the Commission.
Many market observers are closely watching the weather conditions in Brazil, as any signs of further dryness or the formation of La Nina next year could help dial back expectations for Brazil's sugar output and alleviate the concerns over a glut.
In other markets, cocoa for December added 0.2% to close at $2,067 a ton, arabica coffee for December delivery was up 0.1% to settle at $1.2430 a pound, frozen concentrated orange juice for November was down 1.6% to close at $1.5030 a pound, and cotton edged 0.2% lower to end at 67.63 cents a pound.
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(END) Dow Jones Newswires
October 18, 2017 15:46 ET (19:46 GMT)