SOFTS-Raw Sugar Falls From 4-Year Peak on Technical Correction
Category: Cocoa
(Reuters) – ICE raw sugar futures fell back slightly from an earlier four-year high on Thursday, a technically-driven correction in thin volume ahead of a biennial trade dinner in London.
March raws were down 0.26 cent, or 1.1 percent, at 23.55 cents per lb at 1140 GMT. The front month touched 23.90 cents earlier in the session, the highest since July 2012.
Dealers said concerns about cane production in Thailand, India and Brazil kept the prevalent mood in the market bullish during the course of London Sugar Week.
“The fundamentals continue to point to tightness in Q1 next year and possibly later if CS Brazil harvest starts late. End users price ideas are rising and support is coming in sooner on the futures markets,” wrote trader Nick Penney in a report for Sucden.
Thailand’s cane sugar output for 2016/2017 crop year is expected to fall 3.2 percent because of a widespread drought which will pull refined sugar output lower as well, a government agency said on Wednesday.
Fresh concerns about Thailand have added to existing worries about falling cane production in India and Brazil’s Centre-South region.
“Upside price risks are mainly coming from Brazil, as the sugar harvest might end earlier than expected following a sharp decline in yields during summer,” the European Commission said in a short-term outlook report on Thursday.
“The downside risk is small as market fundamentals are strong, but in the short-term could come from investment funds that could leave the agricultural commodity markets if interest rates increase in the US.”
December whites were off $4.10, or 0.7 percent, at $600.40 per tonne.
Coffee futures were mixed.
November robusta coffee was down $3, or 0.2 percent, at $1,991 per tonne, while December arabica was up 0.30 cent, or 0.2 percent, to $1.4850 per lb.
Coffee farmers in Vietnam, the world’s top robusta producer, will start picking cherries from late this month, and the fresh beans will be mixed with old-crop beans for loading until late November when the harvest peaks, traders said.
Cocoa futures fell, after posting four consecutive rises in previous sessions.
March London cocoa was down 15 pounds, or 0.6 percent, at 2,211 pounds per tonne.
