Sugar tumbles as contracts expire; cocoa at three-year low

Sugar futures tumbled to two-month lows on Tuesday, pressured by the expiry of December raw options and December white futures combined with chart-based selling. New York cocoa fell to its lowest in more than three years on expectations for a global 2016/17 surplus, while the London market dropped to a 9-1/2-month trough. Coffee prices were mixed.
March raw sugar settled down 0.48 cent, or 2.2 percent, at 21.15 cents per lb after falling to 20.77 cents, the lowest for the spot contract since September 16. Traders said the market gravitated toward strike prices at 21.5 cents and then 21 cents, as the serial December options contract traded for its last session. Additionally, the fall below 21.08 cents triggered sell-stops, they said.
December white sugar settled down 1.5 percent at $560.30 per tonne before expiring at the end of the session. "It looks like quite a big one (delivery), probably about 500,000 tonnes," one London dealer said, adding that Central American and Brazilian sugar and possibly Indian supplies were likely to be delivered against the December contract. Tom Kujawa, co-head of the softs department at Sucden Financial, said the Middle East and China had been mentioned as possible destinations for the sugar.
March whites settled down $12.60, or 2.2 percent, at $554.70 per tonne. March New York cocoa settled down $23, or 1 percent, at $2,395 per tonne, after reaching $2,385, the weakest for the second contract since August 2013. The move came after data showed speculators sharply reduced their net long position in New York cocoa futures and options to a 3-1/2-year low.
"The crop outlook in the key growing countries, especially in West Africa, is so good that the surpluses expected for the current 2016/17 season are being upwardly adjusted," Commerzbank said in market note. March London cocoa settled down 7 pounds, or 0.4 percent, at 1,992 pounds per tonne after falling to its lowest since early February at 1,987 pounds.
Robusta coffee futures were higher, with the market supported by delays to the harvest in top producer Vietnam, which added to concerns about tightening global supplies. January robusta coffee futures settled up $37, or 1.8 percent, at $2,136 per tonne, still below last week's two-year high of $2,199. March arabica coffee settled down 0.15 cent, or 0.1 percent, at $1.653 per lb. Speculators raised their bullish arabica coffee stance to a record in the week to November 8, US data showed late on Monday.