BLBG: Sugar Falls as Investors Swap Sweetener for Metals; Cocoa Gains
Oct. 7 (Bloomberg) -- Sugar fell to the lowest price in more than a weak as investors shifted money into metals and other raw materials to obtain higher returns. Cocoa gained.
Before today, sugar dropped as much as 7.6 percent from a 28-year high of 25.43 cents a pound reached on Sept. 30, on signs that India, the world’s largest consumer of the sweetener, is slowing purchases. Yesterday, sugar slid 0.8 percent when 14 of the 19 commodities in the Reuters/Jefferies CRB Index rose and gold touched a record of $1,045 an ounce in New York.
“Speculators are pulling out of that bull market because they’re seeing better opportunities in metals,” said Phil Streible, a Lind-Waldock broker in Chicago. “Sugar has run its course for the moment.”
Raw-sugar futures for March delivery fell 0.65 cent, or 2.7 percent, to 23.35 cents a pound at 10:52 a.m. on ICE Futures U.S. in New York. Earlier, the price touched 23.25 cents, the lowest for a most-active contract since Sept. 28.
Sugar before today more than doubled this year as world output trailed demand.
The March contract failed to surpass its high of 26.25 cents, set on Sept. 1, because “fundamentals are not as bullish as they used to be,” Streible said. “Before, we had such weather threats and supply issues. Not as much now.”
Since Sept. 22, most days have been dry in Brazil’s Center South, the main cane-growing area of the world’s biggest sugar producer, allowing growers to speed up harvesting, analysts said. Sugar surged this year partly because excessive rains slowed harvests in the South American country while rainfall from the monsoon in India, the second-largest producer, was 23 percent below normal through last month.
In another ICE market, cocoa futures for December delivery rose $30, or 0.9 percent, to $3,241 a metric ton.
Before today, the price climbed 20 percent this year, reaching a 15-month high of $3,268 on Oct. 5, as global demand is forecast to exceed production for a fourth straight year.
To contact the reporter on this story: Yi Tian in New York at ytian8@bloomberg.net.
