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Sugar Rallies on Fire at Brazilian Port, Wheat Follows

October 18, 2013 at 21:20 by Vladimir Vyun

Sugar rallied today as fire damaged six warehouses at the biggest Brazilian port. The blaze is under control already, but the facilities were already “totally compromised”. It is not yet clear how much of sugar was damaged. Brazil is the biggest producer and exporter of the sweetener in the world. March futures for delivery of sugar jumped $0.005 (2.63 percent) to settle at $0.195 per pound on ICE today.

Wheat also gained even though experts were pessimistic. In fact, they were worried specifically about the rally that according to their opinion does not reflect the underlying fundamentals. The outlook for the next year’s harvest is very good, meaning ample supply that does not warrant the current high prices. Previously, the grain was rising on concerns about adverse weather in some major growing counties. December contract for delivery of wheat surged as much as $0.1975 (2.88 percent) to close at $7.0575 per bushel on CBoT today.

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