Sugar futures fell to a 34-month low as the outlook for the crop in Brazil, the world’s top producer, signaled ample global supplies. Coffee and cocoa also dropped.
Goldman Sachs Group Inc., citing improved weather in Brazil late last month, today cut its forecast for raw sugar to 17.5 cents a pound from 18.5 cents on Jan. 13. Output in Brazil’s Center South, the main growing region, surged to 1.45 million metric tons in the second half of April from 393,200 tons a year earlier, according to Unica, an industry group.
“The ample supply situation is definitely weighing on the market, and the supply is becoming more ample,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a telephone interview. “Brazil is going to be pulling in a big crop. That will continue to pressure prices.”
Raw sugar for July delivery dropped 0.4 percent to close at 16.95 cents at 2 p.m. on ICE Futures U.S. in New York. Earlier, the price touched 16.92 cents, the lowest for a most-active contract since July 16, 2010.
“While wet weather in April delayed the beginning of the Brazilian Center South harvest, the sugar-cane crush is expected” to be a record, Damien Courvalin, an analyst at Goldman Sachs, said in a report. “With weather improving in the second half of April, we are lowering our three- and six-months price forecast.”
Arabica-coffee futures for July delivery declined 2.4 percent to $1.4055 a pound on ICE, the biggest slump since April 26.
Cocoa futures for July delivery dropped 0.4 percent to $2,344 a ton.
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