Sugar falls most in a month, natgas down again on warm weather

(Reuters) – Raw sugar fell the most in a month on Tuesday on fears of a selloff following speculator hoarding of the commodity, while natural gas tumbled for a second straight session on mild weather forecasts in key U.S. regions.

Arabica coffee plumbed 4-1/2 year lows, aluminum had its sharpest decline in nearly a week, and oil prices also skidded, adding to the correction in commodities.     The Thomson Reuters/CoreCommodity CRB index settled down almost half a percent after losses in 12 of the 19 futures markets it tracks.

Soybeans led the CRB’s gainers, settling up 0.6 percent on bargain buying after posting a near two-week low. Corn also rebounded after hitting a three-year low early in the session, when it was pressured by the likelihood of a record U.S. crop.

Raw sugar was the biggest loser of the day, hitting a more than three-week low. It tumbled as traders reacted to data for the week to Oct. 8 from the U.S. Commodity Futures Trading Commission that showed speculators raising their net long position in raw sugar by 50 percent, the most since Feb. 2010.

“The main reason for it coming off so fast has been the size of the net long position of the funds and speculators. It’s way over what the market was expecting,” a London-based sugar broker said.

Raw sugar’s most-active contract on New York’s ICE closed down 0.46 cent, or 2.4 percent, at 18.45 cents after falling to 18.43, its lowest since October 2.

Arabica coffee on ICE closed down 0.6 cent, or 0.6 percent, at $1.0695 per lb, after touching a 4-1/2-year low at $1.0660.

Natural gas fell to a five-week low after the National Weather Service’s 6-to-10-day and 8-to-14-day outlooks showed mostly above-normal temperatures stretching from Texas to New England.

“It’s all about the (mild) weather. We’re walking around without jackets again,” a Chicago-based gas trader said.

Front-month gas on New York’s NYMEX closed down 2 percent, or 7.3 cents, at $3.496 per million British thermal units after hitting a Sept. 26 low of $3.48. The contract lost 1.8 percent in the previous two weeks and is down 5.7 percent so far this week.

In oil, benchmark Brent crude out of Europe’s North Sea settled down 0.6 percent, or 60 cents, at $109.01 a barrel. U.S. crude lost 0.5 percent, or 48 cents, to finish at $98.20.

In aluminum, the benchmark three-month contract on the London Metal Exchange touched a session high of $1,905.75 a tonne, the strongest since Aug. 22, before ending down 0.6 percent at $1,883.