Investing.com - Sugar futures regained strength on Thursday, as appetite for riskier assets was boosted after the Federal Reserve said it would keep interest rates at historically low levels until late 2014, while expectations that demand from top consumer China will remain strong provided further support.
On the ICE Futures U.S. Exchange, sugar futures for March delivery traded at USD0.2490 a pound during European afternoon trade, rallying 1.65%.
It earlier rose by as much as 1.8% to trade at a session high USD0.2496 a pound. On Tuesday, prices climbed to a two-month high of USD0.2520.
At the conclusion of Wednesday’s policy-setting meeting, the Fed’s Open Market Committee said in a statement that economic conditions “are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.”
The new commitment replaces the statement that economic conditions were likely to stay at the historic low range of 0% to 0.25% until at least mid-2013.
At his press conference following the decision, Fed Chairman Ben Bernanke said that policy makers were “prepared to provide further monetary accommodation” and added that bond buying is “an option that’s certainly on the table.”
The comments fuelled speculation that the central bank may embark on a third round of quantitative easing, sending the U.S. dollar lower against its major counterparts.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.3% to trade at 79.35.
A weaker dollar boosts the appeal of dollar-denominated commodities to overseas buyers and makes raw materials more attractive as an alternative investment.
Dollar-denominated sugar futures contracts tend to rise when the dollar weakens, as the dollar-priced commodity becomes cheaper for holders of other currencies.
Meanwhile, IntercontinentalExchange, operator of the ICE Futures Exchange, said Wednesday that it planned to extend trading hours for U.S. sugar futures starting Monday, January 30.
The extended trading session was designed to overlap with the end of trading in the Zhengzhou Commodity Exchange by 30 minutes in an effort to draw Chinese consumers to the U.S. sugar market.
ICE raw sugar trading will start at 1:30 am Eastern Standard Time, or 06:30 GMT, from January 30 or two hours earlier than the current starting time of 3:30 a.m. EST.
The raw sugar market is the biggest of the agricultural products traded by ICE.
China consumes up to 13.5 million tonnes of sugar annually, accounting for nearly 9% of global production. It imported 2.92 million tonnes of sugar in 2011, up 65.3% from a year earlier.
Elsewhere on the ICE Futures Exchange, cotton futures for March delivery added 0.25% to trade at USD0.9718 a pound, while Arabica coffee for March delivery rose 0.8% to trade at USD2.1920 a pound.
On the ICE Futures U.S. Exchange, sugar futures for March delivery traded at USD0.2490 a pound during European afternoon trade, rallying 1.65%.
It earlier rose by as much as 1.8% to trade at a session high USD0.2496 a pound. On Tuesday, prices climbed to a two-month high of USD0.2520.
At the conclusion of Wednesday’s policy-setting meeting, the Fed’s Open Market Committee said in a statement that economic conditions “are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.”
The new commitment replaces the statement that economic conditions were likely to stay at the historic low range of 0% to 0.25% until at least mid-2013.
At his press conference following the decision, Fed Chairman Ben Bernanke said that policy makers were “prepared to provide further monetary accommodation” and added that bond buying is “an option that’s certainly on the table.”
The comments fuelled speculation that the central bank may embark on a third round of quantitative easing, sending the U.S. dollar lower against its major counterparts.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.3% to trade at 79.35.
A weaker dollar boosts the appeal of dollar-denominated commodities to overseas buyers and makes raw materials more attractive as an alternative investment.
Dollar-denominated sugar futures contracts tend to rise when the dollar weakens, as the dollar-priced commodity becomes cheaper for holders of other currencies.
Meanwhile, IntercontinentalExchange, operator of the ICE Futures Exchange, said Wednesday that it planned to extend trading hours for U.S. sugar futures starting Monday, January 30.
The extended trading session was designed to overlap with the end of trading in the Zhengzhou Commodity Exchange by 30 minutes in an effort to draw Chinese consumers to the U.S. sugar market.
ICE raw sugar trading will start at 1:30 am Eastern Standard Time, or 06:30 GMT, from January 30 or two hours earlier than the current starting time of 3:30 a.m. EST.
The raw sugar market is the biggest of the agricultural products traded by ICE.
China consumes up to 13.5 million tonnes of sugar annually, accounting for nearly 9% of global production. It imported 2.92 million tonnes of sugar in 2011, up 65.3% from a year earlier.
Elsewhere on the ICE Futures Exchange, cotton futures for March delivery added 0.25% to trade at USD0.9718 a pound, while Arabica coffee for March delivery rose 0.8% to trade at USD2.1920 a pound.