Raw sugar futures on ICE tumbled 3 percent on Monday, pressured by the weak currency in Brazil, the world's biggest sugar producer, while arabica coffee fell to a seven-week low after an influential trade house raised a key crop forecast. New York cocoa futures were little changed after Friday's volatile session.
The London markets were closed for a holiday and volume was light on ICE Futures US, Brazil's currency, the real, fell sharply against the US dollar and attracted fund selling, eventually triggering automatic sell orders, traders said. "It's the real. It makes the ethanol price fall so sugar's basically tracking it," said Michael McDougall, director of commodities for Societe Generale in New York.
Ethanol is made from sugar in Brazil. July raw sugar futures settled down 0.4 cent, or 3.1 percent, at 12.51 cents a lb. Traders said technical selling was triggered below 12.55 cents, the April 23 low. Arabica coffee futures dropped for the third straight session, extending losses after Volcafe, the Swiss-based coffee division of commodities house ED&F Man and influential trade house, raised its Brazil 2015 coffee crop forecast to 51.9 million bags. This is the largest forecast to date and is a higher revision that had been expected.
July arabica closed down 1.30 cents, or 1 percent, at $1.329 per lb. July New York cocoa ended down $2, or 0.1 percent, at $2,875 per tonne. The market consolidated quietly after Friday's volatile session when it traded in a wide $110 range, marking an outside reversal that pulled prices well below an eight-week high on currency pressure.
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