Sugar turns higher after setting 2-1/2 year low

Raw sugar futures on ICE turned higher on Wednesday after earlier dipping to the lowest levels in around 2-1/2 years while arabica coffee advanced but cocoa suffered a setback.

Dealers said the prospect of a large cane crop in top producer Brazil had heightened concerns about excess sugar supplies and helped to drive prices to new lows but the market remained susceptible to short-term rallies.

Technical indicators suggesting the market is heavily oversold and a large net short position held by speculators had prompted some dealers to expect a short-term bounce.