Liffe sugar lower

Sugar futures reversed to close lower after hitting four-month highs on Thursday, on profit-taking on the last trading day of the second quarter as the market was viewed as overbought. Concern about possible frost in the near future in top coffee grower Brazil as well as tight robusta supplies in Asia, helped lift coffee prices. Cocoa futures closed firm.
Dealers noted that they expected a moderate to large delivery on July. "It's expiration on July so the first thing was talk about a huge delivery that could be placed against the board today," said Alex Oliveira, senior sugar analyst for brokerage Newedge USA.
"My bet is we're going to be anywhere from 500,000 tonnes to 700,000 tonnes, which is a considerable size delivery." Liffe August white sugar dropped $27.70, or 3.6 percent, to close at $739 per tonne, after hitting a four-month top at $769.50. Expectations of further support by Greece's parliament for austerity measures helped support the rest of the softs complex.
"A combination of macro news (the Greek acceptance in parliament of the austerity package), firmer grains and a weaker dollar/euro rate, plus expectations of a reduction in the (output) estimate in Brazil, are continuing to underpin sugar," said Nick Penney of brokerage Sucden Financial. "There's a bit of concern over Brazil frost risk, which is at the moment is way overstated," one US dealer said.
Weather forecaster Telvent DTN forecast another cool air mass could bring lower temperatures to Brazil July 8-9 that will be colder than what took place earlier this week, noting that the forecast was subject to change. "That's giving it some underlying support but I think we're seeing some month-end short-covering," said Boyd Cruel, softs analyst for Vision Financial Markets in Chicago. Liffe September robusta coffee futures gained $26 to finish at $2,498 per tonne.
"A combination of concerns over frost in Brazil, scaled back output projections for Vietnamese robustas, the weaker dollar, European macroeconomic austerity steps, and higher grains prices, are supporting the softs," said a veteran London-based coffee futures dealer. Liffe September cocoa rose 24 pounds to settle at 1,983 pounds a tonne.