Raw sugar tumbles 5 percent, New York cocoa slumps

Raw sugar futures on ICE sank 5 percent on Monday, their biggest one-day tumble in more than 13 months after a truckers' strike ended in top grower Brazil, while cocoa prices sank to a three-month low. This was in line with larger markets as the Thomson Reuters CoreCommodity Index fell to a seven-week low.
July raw sugar settled down 0.62 cent, or 4.95 percent, at 11.9 cents per lb in heavy volume. That was its biggest one-day drop since April 2017. That took the spot contract well below Friday's three-month high of 12.97 cents.
The weak session followed a sharp drop in total open interest on Friday, when it dropped below 1 million contracts for the first time since May 7, ICE data showed.
Dealers said moves by Brazil to cut fuel prices following nationwide protests from truckers could make it less attractive to use cane to make biofuel ethanol.
"This ethanol outlet for excess sugar supply did not work for many years because Brazil's government fixed the gasoline price at artificially low levels," Commonwealth Bank of Australia analyst Tobin Gorey said in a market note.
"The sugar market's fear is that Brazil's government, under severe political strain, will revert to these older policies." Dry weather in Brazil remained a concern.
"Most estimates of the final sugar production number (in center-south Brazil) are still falling due to probable negative consequences of the drought, and to the expectation that less cane will enable mills to swing the sugar mixed even lower," Marex Spectron said in a report.
August white sugar settled down $15.60, or 4.4 percent, at $337.40 per tonne, its biggest one-day drop since July 2017.
July New York cocoa settled down $107, or 4.35 percent, at $2,351 per tonne, its biggest one-day drop since April 3 and the lowest price in three months.
"The fundamentals in cocoa aren't as bullish as the market perceived them to be. Some think $2,200 is fair price for cocoa," one US trader said.
July London cocoa settled down 67 pounds, or 3.8 percent, at 1,693 pounds per tonne.
July arabica coffee settled down 1.25 cent, or 1 percent, at $1.215 per lb.
Prices fell from the prior session's four-month high, when disruptions to Brazilian exports due to the truckers' strike buoyed prices. Activity is now returning to normal. July robusta coffee settled down $5, or 0.3 percent, at $1,745 per tonne.