ICE sugar higher after spec buying runs out of steam
Published: 01/29/2018, 3:21:00 PM
ICE raw sugar futures rose on Monday, boosted by a bout of buying after data signalled speculative selling may have run out of steam, according to Reuters.
ICE March raw sugar was up 0.12 cents, or 0.9%, to 13.48 cents per lb by 1202 GMT, after climbing to a session high of 13.55 cents.
Speculators sharply increased their net short position in raw sugar contracts on ICE Futures US in the week to Jan. 23, lifting it to a record high, US Commodity Futures Trading Commission data showed on Friday.
This boosted the mood in the market as it signalled funds - having sold so aggressively - may now have to take a breather and potentially cover their short positions.
"The scale of the position is no surprise," said Tobin Gorey of the Commonwealth Bank of Australia. "How and when investors will exit is the interesting issue. And, at this scale, it is a counterweight to the burgeoning sugar surplus."
However, dealers noted gains were capped by the fact that producers remain under-hedged and will likely seek opportunities to sell into any rallies.
ICE March white sugar also rose US$2.80, or 0.8%, to US$358.40 per tonne.
However, worries about ample supplies remained in focus with the European Commission boosting its estimate for EU sugar exports for 2017/18 to 3.2 million tonnes, up from 2.8 million tonnes.
"Increased export supply from the EU is unlikely to help an already well supplied world market," ING said in a market note.