| GEO Business | | Sugar ends higher, seen trying to set a floor | Updated at: 1426 PST, Saturday, March 06, 2010
 NEW YORK/LONDON: Raw sugar futures vaulted higher as the market attempted to establish a bottom after losing more than 30 percent in value since the start of February, brokers said.
Coffee and cocoa prices move up, supported by gains in commodity markets over better-than-expected U.S. jobs data which stoked risk appetite.
New York's May raw sugar futures rose 0.52 cent to settle at 22.19 cents per lb.
Benchmark raw sugar has fallen 30.5 percent since hitting a 29-year top at 30.40 cents on Feb. 1.
Technically, the New York raw sugar market closed back above the 200-day moving average which currently stands at 22.01 cents.
London's May white sugar futures climbed $17.50, or nearly 3.0 percent, to end at $609.50 per tonne.
"Enough is enough. We gave up (over) 800 points based on the funds liquidating positions," said Alex Oliveira, senior sugar analyst for brokers Newedge USA in New York.
"The fundamentals can hold the market right here. I believe we have more potential to the upside," he added.
Although many traders see the sell-off as overdone, confidence remained shaky that the bounce can be sustained.
"The market does look a little bit over-sold, but what does that mean in a market that has been acting as violently as this," said London-based Rabobank executive director Nick Hungate.
Analysts said sugar demand may begin perking up following its 30 percent decline.
Some said that those waiting for the situation to stabilize could step into the market especially if the raws market is seen in the process of establishing a bottom.
"I am beginning to hear physical business going on in Brazil," one said. "The demand is there, and we are still looking at a somewhat tight market going forward."
Cocoa prices were buoyed by mild short-covering as the market extended its recovery from a fall to a 6-month low.
"Given the large drop, the industry has come out as a buyer of both futures and physical cocoa, particularly cocoa butter," said Marcelo Dorea, partner of hedge fund Round Earth Capital.
"Having said that, crops have gotten better (and) demand remains weak. Other than the catching up by the industry that I have referred to, most people (are) no longer talking deficits for this year." he added.
New York's May cocoa futures increased $36 to end at $2,865 per tonne. London's May cocoa contract gained 14 pounds to end at 2,176 pounds a tonne.
Coffee futures were mixed. Traders said the markets tried to stabilize and may have room to go higher.
"We believe that the market has already priced in a significant supply increase and we therefore expect an upward price movement," Commerzbank said in a market note. |  |
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