(Reuters) – Raw sugar futures on ICE fell for the third straight session on Wednesday, on late-day selling and as port congestion in top grower Brazil eased, while cocoa steadied as many traders sat on the sidelines ahead of Britain’s referendum.
Arabica coffee eased on pressure from ample supplies in Brazil. This was in line with the 19-commodity Thomson Reuters CoreCommodity Index, which fell for the second straight day as markets focused on Britain’s vote on whether to remain in the European Union on Thursday.
October raw sugar settled down 0.17 cent, or 0.9 percent, at 19.17 cents per lb, extending losses in a flurry of selling in the final 10 minutes of trade.
“It seems the path of least resistance is back into the recent range above 19 cents to 19.50 cents,” said Tom Kujawa, co-head of softs at Sucden Financial Sugar.
August white sugar settled down 50 cents, or 0.1 percent, at $530.70 per tonne.
In cocoa, upside in the London sterling-based cocoa futures was capped by the firmer pound, which briefly neared the prior session’s 5-1/2-month high against the dollar, as investors cut bets against the pound a day before Britain’s EU vote.
Cocoa prices are influenced by the British pound, which typically influences London cocoa prices to move in the opposite direction and dollar-traded U.S. market prices in the same direction.
Because of this currency relationship, cocoa dealers have been keeping a close eye on expectations for the vote results on Thursday.
“Cocoa traders were taking the wait-and-see approach,” said Peter Mooses, senior market strategist for RJO Futures in Chicago.
“The markets are focused on the Brexit possibilities coming June 23. Extreme volatility is expected in all sectors,” Mooses said.
“A vote to stay in the EU will most likely be bullish for commodities. An exit will bring a negative tone across the board.”
London September cocoa settled up 11 pounds, or 0.5 percent, at 2,264 pounds per tonne.
New York September cocoa settled up $10, or 0.3 percent, at $3,156 per tonne.
Arabica coffee futures edged lower, weighed by an abundant harvest now under way in Brazil.
Andrea Thompson, analyst with CoffeeNetwork, said concerns over a very poor robusta coffee harvest in Brazil supported those futures, which traded near a 10-month peak.
September arabica futures settled down 1.25 cent, or 0.9 percent, at $1.397 per lb.
September robusta coffee settled down $7, or 0.4 percent, at $1,708 per tonne.
