Commodities prices mostly fall as dollar strengthens; sugar backs off 29-year highs

Sugar eases off highs; Commodities mostly lower

NEW YORK — A powerful six-week rally in the sugar market stalled on Tuesday, but traders said strong demand could send prices higher again. Other commodities mostly fell.

A day after hitting a 29-year high of $30.10, sugar for March delivery fell 50 cents to settle at $29.30 a pound.

Sugar prices have soared 32 percent since early December on a combination of increasing demand and concerns about supply.

Fresh orders for sugar have been coming in from several developing countries including Indonesia and Pakistan, said Tom Mikulski, a market strategist at Lind-Waldock. At the same time, he said, Thailand recently lowered its production forecast.

Mikulski said traders in the sugar market are hesitant to send prices above 30 cents a pound again for fear of triggering a wave of selling, even though the supply and demand picture seems to warrant higher prices.

The 30 cents per pound price for sugar is a “major psychological level,” Mikulski said. If it closes above that barrier, Mikulski said, “who knows where it can go.” Mikulski predicts a conservative estimate would be between 32 and 35 cents a pound.

Cocoa prices also retreated, weighed down by a strengthening in the dollar. March cocoa fell $43 to $3,363 a ton.

The ICE Futures US dollar index, which measures the dollar against six foreign currencies, rose 0.3 percent. A stronger dollar makes it more expensive for foreign investors to buy commodities.

The improving dollar helped send most metals and energy prices lower. Gold for April delivery rose modestly, gaining $2.70 to settle at $1,099.50 an ounce, while March silver fell 28.5 cents to $16.86 an ounce.

Copper for March delivery fell 5.35 cents to settle at $3.3395.

Energy prices were hurt by the strengthening dollar as well as reports showing ample supplies. A forecast for another round of cold weather for much of the east coast didn’t provide any support for energy trading.

Benchmark crude for March delivery fell 55 cents to settle at $74.71 a barrel on the New York Mercantile Exchange.

In other Nymex trading in February contracts, heating oil lost 1.5 cents to settle at $1.9508 a gallon, while gasoline dropped 3.34 cents to settle at $1.9674 a gallon. February natural gas futures fell 23.7 cents to settle at $5.485 per 1,000 cubic feet.

Grain prices mostly fell. Wheat for March delivery dropped 4.25 cents to settle at $4.94 a bushel, while corn fell 5.5 cents to $3.6225 a bushel. Soybeans rose 7 cents to $9.475 a bushel.