Today saw equities finish mixed as the Senate rejected a House GOP plan to cut the budget and pass an increase to the debt ceiling. Though this was an expected move, it certainly did not help markets, as investors continually wait for the government to make tangible progress on the debt crisis before the looming deadline. Friday’s trading session also saw oil touch the $100 per barrel mark before finishing just under the triple digit level, likely boosted by strong earnings reports. Likewise, gold had a solid day, finishing above the $1,600 per ounce mark on continued uncertainty over debt. The majority of commodities saw a strong day as well; over five separate futures contracts posted gains of 1% or more. But among all of the winners and losers on the day, two stood out in particular, due to various supply reports from across the globe.
The biggest commodity winner of the day was sugar #11 for the second straight session, giving the sweet commodity its best two-day run since October of 2010. The massive jump came from a low supply report from Brazil, the world’s largest producer of sugar cane, which nearly doubles the second placed India, and is fivefold in front of Chinese production. Reports came in that supply from Brazil was going to be lower than expected, over 13 million tons lower to be exact. One analyst commented that “everything that we’re reading is saying that supply is going to be a little bit low” in regards to the current sugar market. All in all, sugar futures soared 5% on the day to rise close to the 31.5 cent mark to finish the week [see also Ultimate Guide To Sugar Investing].
The biggest commodity loser of the day came from another soft; cocoa. Cocoa futures took a tumble today as an unexpected surplus was reported from West African producers. It was estimated that the 2010-2011 coca surplus would come in at about 156,000 tons; this was revised all the way up to 227,000 tons today, meaning that high stockpiles will force prices down as manufacturers attempt to get rid of the massive amounts of cocoa they will need to store in the coming weeks. Another factor pushing up prices is the Ivory Coast, the world’s largest cocoa producer, as the volatile nation is finally starting to see some more stability, pointing to increased production from that region. Overall, cocoa futures dipped 3.4% in Friday’s trading session, trending back towards the 3,000 mark to finish the week [see also Ultimate Guide To Cocoa Investing].
Disclosure: Charts courtesy of Barchart. No positions at time of writing.