After Tuesday's trading saw the dollar reign supreme, pushing commodities futures brokers and traders to unwind their riskier positions, Wednesday brought a more optimistic attitude as the dollar fell.
News came from Brazil that the center-south region, the heart of Brazil's sugar-growing industry, will produce 10 million metric less sugar this year than it did last year. The drop in Brazilian production is the result of a sustained drought which has affected a broad swathe of agricultural commodities from the region.
"The backdrop is bullish and any thousand-ton reduction in output is going to add to that sentiment," Abah Ofon, an analyst in Dubai with Standard Chartered, told Bloomberg News. "The weaker dollar is adding to that."
Investors are cutting away from the greenback because they expect disappointing results from the Federal Reserve's Beige Book business survey today, and that's boosting dollar-denominated commodities.
On the IntercontinentalExchange, raw No. 11 sugar futures for March 2011 delivery rose 2.377 percent to trade at 29.02 cents per pound.
On the Liffe in England, refined, white sugar futures climbed 1.88 percent to $731.70 per metric ton.
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