Liffe September cocoa ended 23 pounds weaker at 1,822 pounds a tonne on Monday, just above a fresh six-month low for the benchmark second month of 1,820 pounds. Market weighed by broad-based losses in commodity markets and a pick-up in the pace of exports from top grower Ivory Coast.
Liffe August white sugar closes $12.40 lower at $612.90 a tonne in line with losses in oil and other commodity markets as a stronger dollar and euro debt crisis weighed.
Liffe July robusta coffee ended $4 lower at $2,539 a tonne. Strength in arabica market helped to partially offset the bearish impact of widespread losses in commodity markets. Cocoa prices eased as exports from Ivory Coast weighed, while coffee prices bucked the trend for weaker commodity prices, trading higher.
Crude oil futures slipped more than $3 due to the peripheral euro zone's debt crisis, which pushed the dollar to a two-month high versus the euro and knocked broader equity markets lower. "So far commodities in general are a little under pressure as the dollar is relatively strong," Thomas Kujawa of brokerage Sucden Financial said.
"We seem to be have been stuck inside a 21 cent to 23 cent range now for the last 10 sessions," Kujawa added. Sugar prices traded at the lower end of their recent range, as some buyers waited for even lower prices. "The price is stuck in a range because of a standoff between buyers and sellers, buyers are wanting to purchase below the market," Peter de Klerk, analyst at sugar merchant Czarnikow said. Egypt's state-owned Sugar and Integrated Industries Company (SIIC) said on Sunday it cancelled a tender to purchase 50,000 tonnes of raw sugar for September shipment due to high prices.
Top producer Brazil continued to focus the initial phase of its cane harvest on ethanol production. "Brazil's domestic values are still at a premium to international prices so the flow of sugar to ports is slow," de Klerk said. "There's obviously a backlog of cocoa to come out so vessels are calling pretty frequently," a London-based trader said.
It's estimated that around half a million tonnes of cocoa was stuck in Ivory Coast as a consequence of the disputed presidential election. Shipments of cocoa from Ivory Coast resumed earlier this month. "That's possibly put a bit of downward pressure on the market," the trader said.
Dealers said, however, weakness in crude oil and many other commodity markets linked to a stronger dollar and eurozone debt worries helped to cap gains. "Volume's thin with sellers reluctant to trade," a London-based broker said. Dealers said coffee prices were likely to be supported due to tight supplies. "I think realistically if the market can hold on here while there is this macro based sell-off it is showing that these kind of prices are going to remain in the long-term," one dealer said.
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