ICE sugar strengthens as producer selling eases
Published: 06/13/2018, 6:59:07 AM
ICE raw sugar futures edged up on Tuesday, boosted by fund short-covering and a slowdown in producer selling, according to Reuters.
ICE July raw sugar was up 0.06 cents, or 0.5%, at 12.41 cents per lb by 1413 GMT.
Dealers said the market's recent rally from a 2-1/2 year low for the front month of 10.69 cents on April 25 has prompted trend-following investors to take a bullish stance.
"We think momentum investors are continuing to buy back their short positions," Commonwealth Bank of Australia analyst Tobin Gorey said in a market note.
Dealers noted speculators had reduced a net short position of more than 170,000 lots on April 24 to only 42,291 lots as of June 5.
A slight weakening in Brazil's real currency on Tuesday, however, helped to pare gains.
Many Brazilian coffee and sugar producers saw a rare opportunity last week to fix prices with solid profit margins at a moment of global oversupply for both products, moving quickly to cash in when the local currency hit its cheapest levels in two years.
Dealers noted both the cane crush and sugar production in centre-south Brazil fell in the second half of May, partly because of a nationwide truckers' strike.
The region produced 1.34 million tonnes of sugar in the second half of May, compared with 1.907 million tonnes in the previous two-week period, cane industry group Unica said on Tuesday.
An S&P Global Platts survey of analysts had seen sugar production at 1.43 million tonnes.
ICE August white sugar rose US$2.50, or 0.7%, to US$353.50 a tonne.