Lower Brazil Output Lifts Sugar to More-Than-Four-Month High

  NEW YORK - Raw-sugar futures ended at the highest price in more than four

months Tuesday after an industry-group report showed a decline in output from

Brazil, the world's top producer of the sweetener.

  Raw sugar for delivery in October on ICE Futures U.S. rose 1% to end at 17.42

cents a pound, the highest settlement since May 10. Sugar for delivery in March

rose 1% to settle at 17.93 cents a pound, the highest point since April 12.

  Futures prices extended earlier gains after the Brazilian Sugarcane Industry

Association, or Unica, reported that sugar production slipped 5.6% in the first

two weeks of September from the same period of 2012 to close to three million

tons, while ethanol production increased 4% to 1.8 billion liters.

  A global glut of sugar had driven down prices this year, encouraging

Brazilian mills to process more ethanol over sugar. From the beginning of the

season in April to mid-September, mills have used 55% of the harvested cane for

ethanol and 45% for sugar, compared with 50.5% for ethanol and 49.5% at the

same point last year, Unica data showed.

  Brazilian consulting firm Datagro estimates that millers will process a

record amount of sugar cane this year, but output will fall below last year's

level. Plinio Nastari, the firm's president, said Brazil's sugar output would

likely total 37.93 metric tons this season, down from 38.18 metric tons last

year.

  Futures of orange-juice concentrate for November delivery briefly entered

bear-market territory, falling more than 20% from the May 30 settlement high. A

quiet Atlantic hurricane season and waning demand for orange juice had pushed

prices lower.

  But prices rebounded in the afternoon, rising 1% on the day to $1.2760 a

pound, the highest settlement since Sept. 16.

  James Cordier, president of Tampa, Fla.-based Liberty Trading Group, said

traders were likely bargain hunting after prices had dropped. He said the

market had been "underpriced." With Tuesday's bounce, prices are down 9% from a

Sept. 13 peak of $1.4020.

  Cocoa for December fell 0.3% to end at $2,603 a ton. Arabica coffee for

December rose 0.7% to end at $1.1785 a pound.

  December-delivery cotton gained 0.1% to settle at 84.38 cents a pound.