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Raw Sugar Stumbles After Testing 23 Month High

June 1, 2016 at 6:35 by Brent Lantzy

After reaching a 23-month high of $17.70 cents per pound, the July raw sugar contract closed down 0.2% to $17.49 cents per pound Tuesday on the Intercontinental Exchange (ICE). The October ’16 contract closed at $17.66 cents per pound.

The spot contract finished the month up 8.2%, posting gains in 8 of the last 9 months.

The commodity has been rallying in part because Sesame Street Bounce House of fund buying, with the CFTC Commitments of Traders report showing speculators having raised their net long position to another record in the week ended May 24.

Harvest disrupting rains in top-producer Brazil, El Niño-related heat and drought in Thailand and India, and growing demand continue to sustain market prices.

After posting a 1.2% loss against the dollar on Tuesday, the Brazilian real finished its worst month in 2016 as fears continue to mount over Acting President Michel Temer’s ability to restore confidence in the Brazilian economy following the corruption scandal implicating his predecessor. A weaker real tends to encourage selling in the world’s number one raw sugar producing economy, thus acting as a bearish weight on the commodity. As of 5:50 AM GMT, the real to dollar exchange rate stood at 3.5784.

August white sugar closed down $5.80, or 1.2%, to $479.40 after reaching a contract high of $488.60.

If you have any questions and comments on the commodities today, use the form below to reply.

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