Raw sugar, arabica coffee extend losses to new lows

NEW YORK/LONDON — Raw sugar and arabica coffee futures on ICE extended losses to multimonth lows on Tuesday, pressured by the weak currency in top grower Brazil, while cocoa prices dropped on expectations for abundant supplies.

The markets hovered around technically oversold levels on the 14-day relative strength index.

March raw sugar settled down 0.18 cent, or 1.30%, at 13.77 cents per pound (/ lb) after falling to 13.70 cents, the weakest for the front month since late September.

The weak Brazilian real fell against the US dollar, encouraging producers to sell by improving their local currency returns, traders said.

Also adding pressure was the market’s weakening technical structure, as prices fell for the sixth straight session and broke below the psychological support level of 14 cents, traders said.

March held a premium of around 0.08 cent over May, after holding a 0.01-cent discount four sessions prior. March white sugar settled down $3.60, or one percent, at $361.90 per ton.

France sharply raised its estimate of 2017 sugar beet production to a record 45 million tons.

March arabica coffee settled down 1.55 cents, or 1.30%, at $ 1.1845 per lb, after falling to a five- and- a- half- month low $1.183.

This was the contract’s seventh straight drop, weakening the chart’s structure, traders said.

“At the moment, the funds are in control of the market,” one dealer said, adding that the market remained vulnerable to further short-selling.

January robusta coffee settled down $40, or 2.30%, at $1,688 per ton.

March London cocoa settled down £ 25 pounds, or 1.80%, at £1,404 per ton.

The market consolidated after sharp gains in the previous session as a wave of speculative short-covering pushed prices off seven-and-a-half-month lows set last week as traders eyed concern about possible defaults in top grower Ivory Coast and the quickening pace of bean arrivals at ports there.

December closed at a £33 discount to March versus £100 on Monday.

March New York cocoa settled down $45, or 2.40%, at $1,867 per ton. —