Raw sugar futures rebound, focus on May expiry; cocoa ends higher

NEW YORK/LONDON — Raw sugar futures on ICE closed higher on Wednesday after falling to the lowest level in over one month earlier in the session, with the expiry of the May contract on Friday providing a short-term focus for the market.

SUGAR: May raw sugar settled 0.03 cent or 0.2% higher at 19.02 cents per pound (lb) as the market rebounded from a dip to 18.80 cents — the lowest level since March 18.

Dealers noted May’s premium to July had widened slightly to around 0.12 cent while the open interest had been falling steady, indicating a lack of appetite to take delivery against the contract.

The largest ever delivery for a May raw sugar contract was in 2020 when it totaled 44,449 lots.

Brazil’s government expects sugar production to grow 15% in the new season, while it sees ethanol output falling.

Brazilian sugar industry group Unica is expected to release this week its first production report for the new season, with data from the first half of April. August white sugar rose $3.00 or 0.6% at $523.50 a ton.

COCOA: July New York cocoa rose $30 or 1.2% to $2,537 a ton, recovering some ground after the prior session’s fall to an eightweek low of $2,478.

Dealers said concerns about weak demand persisted, however, following lower first-quarter cocoa grinds in North America and Asia.

July London cocoa settled £11 or 0.6% higher at £1,782 per ton.

COFFEE: July arabica coffee settled 5.6 cents or 2.5% lower at $2.1555 per lb, hitting the lowest price since March 30 earlier at $2.1455.

Dealers said the market was weighed by concerns about weak demand while technical indicators had also become bearish.

Rabobank said in a note that however difficult it is to measure demand trends, the fact that many people are not going back to offices has a detrimental impact on coffee demand, while higher prices could as well hit sales in some countries.

July robusta coffee fell $22 or 1.1% at $2,032 a ton.