Sugar falls on signs of bigger Brazilian harvest

AP News
Posted: Sep 16, 2011 3:42 PM
Sugar falls on signs of bigger Brazilian harvest

Sugar prices plummeted 6.7 percent Friday on expectations that Brazil's production may be bigger than expected this year.

Other commodities were mixed. Gold topped $1,800 an ounce again, silver rose 3.4 percent and oil fell 1.6 percent.

A Brazilian sugarcane trade group said production increased in the last two weeks of August. That eased concerns the crop may have been affected by bad weather or other problems. Brazil is the top global producer of sugar.

Spencer Patton, founder and chief investment officer for hedge fund Steel Vine Investments LLC, said he does not expect lower prices for sugar futures on commodities markets to be passed along to consumers for some time.

"Until they start taking the sugar packets off the table when you go to the restaurant, it's still a relatively cheap commodity," he said.

Sugar for September delivery fell 1.98 cents to end at 27.52 cents per pound. The price has fallen 14 percent this year but remains 12 percent higher than a year ago.

In other trading, gold rose after European finance ministers rejected calls by U.S. Treasury Secretary Timothy Geithner to agree on a way to help Greece avoid default. Investors fear that the ongoing crisis would affect the global economy and reduce demand for commodities.

CPM Group analyst Carlos Sanchez said many investors bought gold Friday because they were unsure about what developments would occur over the weekend.

Gold for December delivery rose $33.30 to end at $1,814.70 an ounce. December silver rose $1.33 to $40.831 per ounce.

December copper fell 2.55 cents to finish at $3.9315 per pound, October platinum rose $33.30 to $1,813.90 per ounce and December palladium rose $9.45 to $732.95 an ounce.

Benchmark oil fell $1.44 to finish at $87.96 per barrel on the New York Mercantile Exchange. Heating oil dropped 1.57 cents to $3.0089 per gallon, gasoline futures rose 0.13 cent to $2.7841 per gallon and natural gas fell 6.9 cents to $3.809 per 1,000 cubic feet.

December wheat fell 7.75 cents to end at $6.8825 per bushel, December corn fell 9 cents to $6.92 per bushel and November soybeans 3.25 cents to $13.555 per bushel.