-EU clears way for white sugar exports

-Cocoa underpinned by West Africa crop concerns

NEW YORK/LONDON: Raw sugar futures rose to a five-week high on Thursday, on follow-through strength from the benchmark’s historic surge earlier in the week while all eyes remained fixed on the approaching March expiry.

Cocoa prices also advanced while coffee turned slightly lower.

Dealers said the expiry of the March raws contract on Monday was a key focus for the sugar market with a delivery of around 500,000 tonnes anticipated if the front month remains around parity with May. It was around a 0.04 cent premium on Thursday, after trading widely this week from a 0.18 cent discount to a 0.23 cent premium.

“Traders will be waiting to see how the expiration plays out on Monday, and whether or not a receiver has emerged and whether a receiver will stay or fade out in response to price opportunities,” said James Cassidy, global head of sugar for Societe Generale in New York, in a note.

May raws settled up 0.32 cent, or 2.3 percent, at 14.2 cents per lb, the highest since Jan. 22, extending gains on chart-based buying after breaching the 100-day moving average.

The market strength followed Tuesday’s violent rally when May surged more than 9 percent, its biggest one-day jump, on talk about sudden interest for the March delivery. The move made the market technically strong, having formed a potential base and lifted it well above a long-term downtrend.

Exchange data showed total open interest tumbled more than 37,550 lots on Tuesday and Wednesday, which traders attributed to heavy short-covering.

May whites settled up $6.40, or 1.6 percent, at $405.30 per tonne.

The European Union cleared the way for the export of 700,000 tonnes of white sugar, heightening concerns about tight supplies in its internal market and possibly triggering more imports of raws in coming weeks.

“The situation (within the EU) will be tighter in the short term and we would expect to see some raws imports later in the year,” one European trader said.

Cocoa futures were underpinned by concerns that hot, dry weather could reduce the size of the West African beans.

May London cocoa settled up 19 pounds, or 0.9 percent, at 2,195 pounds per tonne, while May New York cocoa settled up $18, or 0.6 percent, at $2,947 per tonne.

May arabica settled down 0.85 cent, or 0.7 percent, at $1.1615 per lb, while May robusta coffee settled down $3, or 0.2 percent, at $1,368 per tonne.—Reuters