The Iraq crisis continued to support gold prices as does continuing worries about Ukraine, both of which have strengthened the precious metal’s safe-haven investment appeal. Gold futures for August delivery on Comex hit their highest since mid-April on June 25, touching $1,326 an ounce before settling at $1,322.60. August gold on Comex finished last week at $1,316.60 an ounce.
Mixed direction for softs
Among soft commodities, cocoa on New York’s ICE Futures U.S. exchange eased back from last week’s near three-year high amid strong deliveries at ports in top grower Côte d’Ivoire. Reuters reported bean arrivals for this season’s crop had reached more than 1.57 million tonnes by June 22, up 21 per cent on the same year-earlier period. Nevertheless, the market remains supported by the strong outlook for demand and expectations of another year of global deficit.
The ICE September cocoa contract settled at $3,062 a tonne on June 25 after rallying to $3,128 on June 18, its highest since August 2011. Cocoa for delivery in the same month on NYSE Liffe settled at £1,920 a tonne at midweek.
Meanwhile, ICE raw sugar futures eased back from the near five-week high of 17.98 cents a pound reached on June 19 following the latest cane crush data from top producer and exporter Brazil. Unica, Brazil’s sugarcane industry association, reported the cane crop in the main Center-South growing region produced 29.7 percent more sugar during June 1-16 at 2.33 million tonnes than in the same period a year earlier. An additional 5.8 million tonnes of cane was also harvested June 1 through June 16 compared with the first two weeks of June 2013. But Unica warned the lack of rain was hurting the development of the cane due to mature later in the year.
The ICE July raw sugar contract closed at 17.72 cents a pound on June 25, down 0.09 cents on the day. The July contract expires at the end of this month.
White, or refined, sugar for August delivery on NYSE Liffe was also weaker, settling at $480.35 a tonne on June 25, down $11.15 on last week’s finish.
Reflecting the continuing uncertainty over top producer Brazil’s output in the current season (April 1-March 31), arabica futures prices rallied to a four-week high at midweek following reports that many beans have not developed as usual after extreme drought and high temperatures hit key growing areas in the south of the country in January and February. The full extent of the crop damage will not become clear until nearer the end of the harvest which is now fully underway.
Benchmark ICE arabica for September delivery on ICE Futures U.S. hit a four-week high of $1.8330 a pound on June 25 before settling at $1.8175.
While care has been taken to ensure that the information contained in this report is accurate, it is supplied without guarantee. The author can accept no responsibility for any errors or any consequence arising from the information provided.
