ICE Raw Sugar Drops to Near 11-month Low, Coffee Falls

(The Times of India) – Raw sugar futures slid on Tuesday to the lowest level since last May as speculative selling and ample supplies added pressure, while Robusta coffee also weakened and cocoa futures edged higher.

SUGAR

* May raw sugar settled down 0.38 cent, or 2.30 percent, at 16.16 cents per lb, extending losses in late-day trade as buyers liquidated long positions. Benchmark prices touched their lowest since May 2016.

* Dealers pointed to sustained selling by speculators, which has intensified the bearish momentum driving the market.

* “The speculative and fund community seems intent on selling on any recovery, thus playing the long game, that of a looming surplus next season,” Sudden Financials Nick Penney said in a market update. “We expect to see a test of 16 cents soon.”

* Good weather conditions in top produce Brazil also weighed on sentiment, adding to expectations for ample supplies.

* Brazilian producers are likely to continue to favor sugar over ethanol since the former has proven more profitable, the International Sugar Organization noted in its monthly report on Tuesday.

* May white sugar closed down $9.10, or 1.92 percent, at $464.30 per tonne, after touching $463.70, also the weakest level since May 2016.

COFFEE

* May Robusta closed down $6, or 0.28 percent, at $2,144 per tonne, with dealers noting the market was stuck in a narrow trading range.

* “From what we see, the funds are maxed out in London,” one dealer said.

* Although lower output in top producer Vietnam has fueled expectations for a global supply crunch, dealers noted nearby supply is not squeezed because farmers have sold forward much of their crop in a bid to lock in higher prices.

* May Arabica coffee finished down 0.1 cent, or 0.07 percent, at $1.3775 per lb.

* Coffee exports from Honduras, which mainly produces Arabica, jumped 62 percent in March, compared with the same month last season, the country’s national coffee institute said on Monday.

COCOA

* May New York cocoa finished up $3, or 0.14 percent, at $2,110 per tonne, as the May London contract settled up 7 pounds, or 0.41 percent, at 1,696 pounds per tonne.

* Dealers said the market lacked direction, with the key driver still weaker technicals.

* Both London and New York have retreated in the last two weeks, after a wave of short covering sharply boosted levels off multi-year lows.