Raw-Sugar Futures Climb to Two-Week High as Dollar Declines

Sugar prices rose to a two-week high as the dollar’s decline enhanced the appeal of some raw materials.

The greenback dropped for the first time in seven sessions against a basket of major currencies.

Raw-sugar futures have declined 45 percent this year, and the slump may encourage demand, Marcos Marinho Lutz, the chief executive officer of Cosan SA Industria & Comercio, said today in an interview at an industry conference in New York.

“Most of it has to do with the dollar coming down,” said Michael K. Smith, the president of T&K Futures & Options in Port St. Lucie, Florida. In sugar, “this bottom was way overdone, and a fair price is probably going to be somewhere between 16 cents and 18 cents,” he said.

Raw sugar for July delivery rose 0.13 cent, or 0.9 percent, to 14.93 cents a pound on ICE Futures U.S. in New York. Earlier, the price reached 15.09 cents, the highest level for a most- active contract since May 4. Earlier, the commodity dropped as much as 2.6 percent.

The price may top 16 cents over the next few weeks, Smith said.

Among so-called soft commodities, orange-juice futures rose to a two-month high, and cotton jumped the most in three weeks.

“The softs in general are the strong sector now, amazingly enough,” Smith said.

The Reuters/Jefferies CRB Index of 19 raw materials fell to the lowest level since September, led by precious metals, amid speculation that Germany’s ban on some bearish investments will damp demand for riskier assets.

In London, white-sugar futures for August delivery increased $6.10, or 1.3 percent, to $487.20 a metric ton on the Liffe exchange.

source: bloomberg