Sugar traders most bearish since April on Brazil

Prices had entered a bull market on July 9

China Imports

The changing weather in Brazil has yet to be reflected in speculative wagers in U.S. futures markets. Hedge funds and other money managers increased bets on a price rally in the six weeks ended July 17, U.S. Commodity Futures Trading Commission data show. They held a net-long position of 109,518 U.S. futures and options, the most since April 3.

China, the third-biggest user after India and the European Union, imported about 2.7 million tons of sugar from the start of the season in October through June, from 910,000 tons a year earlier, according to customs data. The nation will import 3.1 million tons in 2011-12, the International Sugar Organization in London estimates.

Worldwide purchases may climb even with mounting concern that global growth is faltering. Consumption expanded every year since 1995, USDA data show. Reports showed this week the U.K. economy shrank the most in three years last quarter, German business confidence declined more than forecast and U.S. new- house sales unexpectedly fell last month.

U.S. Drought

In other commodities, 17 of 26 people surveyed anticipate higher corn prices next week and three said the grain will decline, while 16 of 26 said soybeans will rally and four expected lower prices. Traders are bullish for a 14th week after the worst U.S. drought in more than a half century hurt crops and drove prices to a record July 23.

The USDA has declared 44 percent of U.S. counties as disaster areas because of drought, and the agency cut its forecasts for domestic corn and soybean production July 11. Corn rose 22 percent to $7.87 a bushel this year as soybeans jumped 32 percent to $15.975 a bushel.

Fifteen of 30 traders and analysts surveyed expect gold to climb next week and six were neutral. Futures on the Comex exchange in New York are up 3.3 percent since the start of January at $1,618.70 an ounce. Holdings in bullion-backed exchange-traded products are about 0.7 percent below the record 2,413.6 tons set July 5, data compiled by Bloomberg show.

Ten of 20 people surveyed said copper will rise next week and six predicted declines. The metal for delivery in three months, the London Metal Exchange’s benchmark contract, slipped 1.8 percent this year to $7,466 a ton.

Global Growth

The S&P GSCI gauge of commodities dropped 2.8 percent since reaching an 11-week high on July 19. Growth in China, the biggest consumer of everything from copper to soybeans, slowed for a sixth consecutive quarter, the government said July 13. The global economy will expand 3.5 percent this year, from 3.9 percent in 2011, the International Monetary Fund estimates.

“Global growth is still enough to see an increase in demand, but it’s going to be pretty modest,” said Robin Bhar, an analyst at Societe Generale SA in London. “For commodities, the big factor has to be for less uncertainty and more clarity on China.”

*T Gold survey results: Bullish: 15 Bearish: 9 Hold: 6 Copper survey results: Bullish: 10 Bearish: 6 Hold: 4 Corn survey results: Bullish: 17 Bearish: 3 Hold: 6 Soybean survey results: Bullish: 16 Bearish: 4 Hold: 6 Raw sugar survey results: Bullish: 3 Bearish: 10 Hold: 3 White sugar survey results: Bullish: 5 Bearish: 7 Hold: 4 White sugar premium results: Widen: 8 Narrow: 2 Neutral: 6 *T

Bloomberg News

--With assistance from Agnieszka Troszkiewicz in London, Glenys Sim, Chanyaporn Chanjaroen and Luzi Ann Javier in Singapore, Jae Hur in Tokyo, Phoebe Sedgman in Melbourne, Tony C. Dreibus in Chicago and Debarati Roy in New York. Editors: Stuart Wallace, Claudia Carpenter

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