By Julie Wernau
Sugar futures moved higher Monday, on track for the second straight session of gains as the Brazilian real moved higher against the dollar, discouraging sales from the world's largest producer.
Raw sugar for March delivery rose 0.6% to 19.95 cents a pound on the ICE Futures U.S. exchange.
Arnaldo Luiz Correa, director of Archer Consulting in Brazil, said producers in the region are no longer seeing the prices in reais per ton that encouraged sales and kept a lid on New York prices up until early October.
"It is getting harder and harder for us to be able to see sugar prices at the high levels in real per ton that we saw up until early October, when the market reached 1,761.89 reais per ton," he said.
Prices are now closer to 1,557.56 reais per ton, he said, an 11.6% fall, as the price of sugar in dollars has dropped more sharply than the real against the dollar.
The big question that remains in the sugar market is if long-positioned index funds will continue their slow selling streak.
Analysts are awaiting Monday night's data from the U.S. Commodity Futures Trading Commission, which reports the positions of traders in the market. Typically the report is released on Friday, but it was delayed because of the Thanksgiving holiday.
Net bullish bets in the sugar market dropped to the lowest level since June 7 in the previous report, with hedge funds and money managers betting on higher prices holding 218,496 contracts vs. 10,137 contracts for the bears.
After falling to a seven-year low of 10.39 cents a pound in August 2015, the market has been on a bull run and reached a 4.5-year high Oct. 5 of 23.81cents a pound.
The market has been favored by bullish speculators after years of glut finally reversed, leaving more demand for the sweetener in the market than new supply.
In other markets, cocoa for March was flat at $2,414 a ton, arabica coffee for March rose 0.8% to $1.566 a pound, frozen concentrated orange juice lost 0.2% to $2.1595 a pound, and March cotton rose 0.9% to 71.92 cents a pound.
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(END) Dow Jones Newswires
November 28, 2016 11:32 ET (16:32 GMT)
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