Sugar prices fell sharply Tuesday after reports indicated Brazil is harvesting a large crop that could boost global supplies.
Sugar prices declined 1.27 cents, or 7.1 percent, to settle at 16.57 cents a pound in heavy trading. Energy and metals prices rose while grains fell.
In the latest setback for sugar futures, prices have fallen about 43 percent since it hitting a 29-year high in early February because investors are leaving the market amid reports of improving supply, said Richard Feltes, director of commodity research for MF Global in Chicago.
The sugar market has drawn more attention this year because supplies have been at a global deficit in the past two years due to crop damage and poor weather in growing regions, said Spencer Patton, founder and chief investment officer of Steel Vine Investments LLC, a hedge fund that trades in commodities.
India, which is a larger sugar producer, has seen two consecutive years of below-normal levels of rain during their monsoon season, which affected the crop. Patton said he believes it's unlikely the country would suffer through a third consecutive year of light rains.
Reports from Brazil, meanwhile, indicate crop levels are significantly higher than in the past two years, he said.
In other trading, gold for April delivery rose $4.20 to $1,103.70 an ounce; silver for May delivery rose 9.2 cents to $17.027 and May copper fell 0.15 cent to $3.379 a pound.
Grain contracts for May delivery fell. Wheat prices declined 9.75 cents to $4.7675 a bushel; soybeans dipped 0.5 cent to $9.68 a bushel and corn fell 8 cents to $3.6275 a bushel.
Benchmark crude for May delivery rose 31 cents to settle at $81.91 a barrel on the New York Mercantile Exchange.
In other Nymex trading in April contracts, heating oil rose 1.81 cents to settle at $2.1018 a gallon, gasoline added 0.66 cent to close at $2.2628 a gallon. Natural gas gained 5.1 cents to settle at $4.13 per 1,000 cubic feet.
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