(Reuters) – Raw sugar futures on ICE fell to a five-week low on Thursday, dropping for the third straight session on chart-based selling and as dealers focused on cane industry data expected next week.
London cocoa also fell to a five-week trough as the charts weakened, while coffee rose slightly.
Spot raw sugar futures were on track to close July down around 7 percent, their first monthly drop since January.
October raw sugar settled down 0.3 cent, or 1.6 percent, at 18.80 cents per lb, having touched 18.75 cents, the lowest since June 24.
The resumption of July’s slide below 19.13 cents leaves Monday’s 20.11 high in its wake.
“Until and unless such 20.11-plus strength is shown, the extent of this exposed correction or reversal lower is indeterminable and potentially severe given the extraordinarily frothy levels of bullish sentiment,” said Dave Toth, senior analyst of Market Insights for RJO’Brien in Chicago.
A global deficit is widely expected.
Also pressuring sugar prices was favorable harvest weather in center-south Brazil, with dealers expecting data from Brazilian cane industry association Unica on Monday to show a rapid crush in dry weather in the first half of July.
“Until we see any signs of poor weather, the market sees sugar pouring out of Brazil,” one analyst with a Western trade house said.
October white sugar settled down $3.90, or 0.8 percent, at $518.10 per tonne.
London cocoa futures fell to the lowest since June 24 on weakening charts and after data showed grinder output in top grower Ivory Coast fell 9 percent so far this season due to poor bean quality.
September London cocoa settled down 20 pounds, or 0.9 percent, at 2,332 pounds per tonne, after falling to 2,322 pounds, the lowest since June 24.
September New York cocoa settled down $7, or 0.3 percent, at $2,850 per tonne, and was on track to fall for the third straight month.
Robusta coffee futures inched up, supported by tight global inventories.
September robusta settled up $9, or 0.5 percent, at $1,813 per tonne, while September arabica settled up 0.95 cent, or 0.7 percent, at $1.4215 per lb.
“Front-month arabica prices have failed to break above resistance at $1.50/lb and are now showing a bearish divergence on short-term momentum indicators suggesting a likely move lower,” said BMI Research in a note.
A Reuters poll showed that coffee prices are expected to hit their highest since early 2015 by the end of this year.
