Whites-over-raws sugar premium rises

LONDON/NEW YORK,- Chart-based hedge fund buying buoyed by a weaker dollar drove up cocoa, sugar and coffee futures on Wednesday.

"It's Commodity Trading Advisors (buying)," said Romain Lathiere, fund manager with Swiss-based Diapason Commodities Management. "It's correlated to technical analysis programmes."

Referring to the rally in ICE cocoa futures, a New York-based commodity trading advisor said, "It looks like a short-covering rally, technical buying."
The surge came after the key May cocoa contract broke through $2,300 per tonne.
"Have to believe they (funds) jumped in over $2,300 to $2,315 in New York and 1,818 (pounds) in London," he said.

Volume on ICE, however, was thin.
ICE May stood at $2,349 per tonne, up $104 or 4.6 percent, at 1623 GMT.
London cocoa futures jumped more than 4.5 percent to a session peak of 1,852 pounds per tonne on CTA buying, dealers said.
London May later pulled back slightly to 1,849 pounds a tonne, up 79 pounds or 4.5 percent, in reasonable volume of 8,128 lots at 1623 GMT.
Dealers referred to CTA buying across the softs complex as the dollar weakened broadly, with investors feeling more comfortable buying risky assets such as stocks.
Talk that India could remove an import duty on white sugar again drove white sugar futures higher, triggering increased physical buying interest, dealers said.
But analysts were sceptical that India, which recently swung from net exporter to importer of sugar, would import physical white sugar imminently.
"People who are short of the whites are covering their positions just in case (the market climbs further)," said Jonathan Kingsman, managing director of Lausanne-based consultancy Kingsman SA.
"Domestic prices (in India) are not that high, and we were surprised that a request (to remove duty) should be made now."
He was referring to an Indian press report which, quoting a government official who asked not to be identified, said the election commission was considering a proposal from the government to remove the duty on refined sugar.
The benchmark whites-over-raws premium has risen to around $112 per tonne from $100 on Friday.
London May white sugar futures were up $9.0 or 2.4 percent at $391.60 per tonne in slim volume of 1,339 lots at 1624 GMT, while ICE May raw sugar was up 0.27 cent or 2 percent at 12.86 cents per lb.
Some traders said that sugar had upward price potential as the market was still below its recent highs.
Robusta and arabica futures joined the chart-driven rally in modest turnover, dealers said.
London May robustas were up 8 pounds to 1,444 pounds per tonne in low turnover of 3,107 lots at 1626 GMT, while May arabicas were up 1.5 cent at $1.0745 per lb.
Brazil's coffee farmers are keeping a tight hold of their beans after a flurry of trade early in the year, with weak demand by foreign importers holding prices at levels too low to entice growers to sell.

source: guardian