Sugar futures surged Tuesday to the highest level in more than four years as the market continued to worry about production from Brazil, the world’s largest grower of the commodity.
Raw sugar for October delivery rose 2.1% to settle at 23.02 cents a pound on the ICE Futures U.S. exchange, the highest closing level for the front-month contract since July 25, 2012.
Datagro, a Brazil-based agricultural consulting firm, said that it might further cut its estimates for Brazil’s sugar crop as soon as Tuesday.
Prospects for a smaller-than-expected crop down the road have probably led some trading houses to delay their sugar deliveries, analysts say.
The level of open interest for the expiring October contract took a steep dive to 32,376 contracts on Tuesday, compared with 51,635 contracts at the same time last year, when traders took a record 1.2 million ton delivery from the exchange.
Source: www.wsj.com