Tuesday, November 9, 2010

Sugar Rises to 29-Year High in New York; Cocoa, Coffee, Orange Juice Gain

When will it crash?

Aivars Lode

Sugar Rises to 29-Year High in New York; Cocoa, Coffee, Orange Juice Gain
By Stephen Morris and Leslie Patton - Nov 9, 2010 3:05 PM ET

Raw sugar rose for a 10th straight session, reaching a 29-year high, on concern that India may cap exports to boost domestic supplies after a smaller-than-expected cane harvest. Cocoa, coffee and orange juice gained.

India, the world’s second-biggest sugar producer, may export 1.5 million to 2 million metric tons of the sweetener, New York-based Commodore Research & Consultancy said yesterday. Earlier this year it predicted 3.5 million tons. Flooding in the state of Uttar Pradesh triggered cuts to forecasts, Commodore said.

“Further heavy rains in India are causing analysts to restrict upward production estimates,” Michael McDougall, a senior vice president at Newedge USA, said in a note e-mailed today. “There is a finite amount of time for the Indian harvest to take place.”

Raw-sugar futures for March delivery added 1.23 cents, or 3.9 percent, to settle at 33.11 cents a pound at 2 p.m. on ICE Futures U.S. in New York. Earlier, the price reached 33.32 cents, the highest level for a most-active contract since Jan. 7, 1981. The commodity has gained 23 percent this year.

Raw sugar will “fly to 35 cents in the coming days,” said Jonathan Bouchet, a Geneva-based trader at OTCex Group.

U.S. Sugar Output

U.S. output will total 8.23 million short tons in the year that began Oct. 1, down 1.8 percent from 8.39 million forecast last month, the Department of Agriculture said today. Production estimates for Louisiana sugarcane and U.S. sugar beets were lowered.

Production numbers were “bullish based on trader’s expectations, said Jimmy Tintle, an analyst at Transworld Futures in Tampa, Florida.

The U.S. will import 2.74 million tons, 21 percent more than was previously forecast, the agency said.

In London, refined sugar for March delivery gained for the sixth time in seven sessions, climbing $24.40, or 3.1 percent, to settle at $802.70 a metric ton on NYSE Liffe, after touching $810.10, the highest level for a most-active contract since at least January 1989, when Bloomberg began recording data.

Robusta coffee rose to the highest price in more than two years on speculation that adverse weather may delay crop collection in Vietnam, the world’s second-largest grower. The harvest, which usually starts in November, may be delayed by rains in the Central Highlands, Andrea Thompson, an analyst at CoffeeNetwork in Belfast, Northern Ireland, said yesterday.

Coffee Rises

Robusta-coffee futures for January delivery climbed $14, or 0.7 percent, to settle at $2,060 a ton on NYSE Liffe, after reaching $2,098, the highest price since Sept. 29, 2008.

In New York, arabica-coffee futures for December delivery, the contract closest to expiration, added 8.95 cents, or 4.3 percent, to settle at $2.1705 a pound. Earlier, the price reached $2.1785, the highest level since June 1997. The March contract, which has the most open interest, advanced 9.05 cents, or 4.3 percent, to settle at $2.1975 a pound.

Cocoa futures for March delivery gained $56, or 2 percent, to settle at $2,884 a ton in New York. In London, the chocolate ingredient for December delivery advanced 44 pounds, or 2.4 percent, to settle at 1,873 pounds ($3,002) a ton in London.

Orange-juice futures for January delivery rose 6.25 cents, or 4 percent, to settle at $1.615 a pound on ICE, after falling in the previous three sessions.

To contact the reporters on this story: Stephen Morris in London at smorris39@bloomberg.net; Leslie Patton in Chicago at lpatton5@bloomberg.net.

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.

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