Sugar plunges amid global supply surplus

Source: Dukascopy Bank SA
Farm commodities apart from sugar advanced on Wednesday, drawing strength from the last week's USDA Wasde report. The sentiment on grains was also underpinned by South America weather concerns. Soil moisture in Argentina, Paraguay and southern Brazil is expected to decline in the next ten days, reported World Weather Inc.

Wheat edged higher on worries that dryness in many US hard winter wheat growing regions will cut wheat crops. Wheat found further support on speculation that lower prices may attract foreign buyers and livestock producers.

Corn added 0.1% as lack of rain in South America may reduce harvest. However, the gains were restricted as US ethanol production tumbled below the forecasts last week. Moreover, US biofuel inventories climbed 2.6% to 20.36 million barrels last week.

Sugar was the only loser on combination of global supply glut and concerns that demand from South Africa and Russia may decline.

Coffee was the top-gainer despite expectations of an increase in producer selling and worries over excessive global supplies.


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