(Reuters) – Raw sugar and Arabica coffee futures on ICE slipped on Tuesday, pressured by the firm U.S. dollar and commodity-wide selling, though the move lifted the spot white sugar premium to a three-month high over the October contract.
Cocoa prices were mixed after the sterling fell from a 5-1/2-month high against the U.S. dollar ahead of Thursday’s referendum to decide Britain’s European Union membership.
The 19-market Thomson Reuters CoreCommodity Index fell more than 1 percent following a two-day rally on speculation that Britain will stay in the EU.
Raw sugar futures fell on technically driven selling and as port congestion in top grower Brazil eased, taking prices further away from last week’s contract high.
October raw sugar settled down 0.42 cent, or 2.1 percent, at 19.34 cents per lb.
“It is not that bearish enthusiasm has been resurrected, but rather that enough traders from commercials and funds believe that higher levels will eventually be achieved and have positioned already along the 728 point advance from the February lows,” said James Cassidy, director, global head of Sugar Derivatives for Societe Generale in New York, in a note.
August white sugar settled down $5.2, or 1 percent, at $531.2 per tonne.
The spot contract LSUQ6-V6 fell less significantly than October futures, causing the August premium to surge as high as $6 per tonne, the highest since mid-March.
“While it has eased off from that high, which also represents important technical resistance being the double high from April, it has also helped buoy up the August flat price,” said consultancy Agrilion Commodity Advisers in a note.
Arabica coffee futures dropped as concerns over risks of frost damage to coffee trees ebbed.
“It’s probably profit taking,” said Carlos Mera, commodities analyst with Rabobank.
September arabica futures settled down 0.35 cent, or 0.3 percent, at $1.4095 per lb.
September robusta coffee moved in the other direction to settle up $22, or 1.3 percent, at $1,715 per tonne.
“The underlying support in robusta is from the view that inventories are pretty low,” said Abah Ofon, lead analyst at Agrimoney.
Cocoa futures firmed.
London September cocoa settled up 6 pounds, or 0.3 percent, at 2,253 pounds per tonne, turning positive as the pound shifted lower.
New York September cocoa settled up $23, or 0.7 percent, at $3,146 per tonne, buoyed by earlier sterling strength.
