London August white sugar futures closed lower on a speculative sell-off on Wednesday in a correction from Tuesday's surge to a seven-year front-month continuation high, traders said. Liffe August settled down $3.30 at $277.00 a tonne in volume of 6,004 lots, having moved from $280.10 to $266.00.
However, Liffe second-month October settled up $2 at $267.80 in volume of 3,655 lots after trading from $267.80 to $261.00.
"It is a speculative correction from yesterday's highs," one trader said.
Another trader said he believed a fund had sold off around 1,500 lots early in the session, but there was no official confirmation.
The speculative correction followed a surge to a seven-year front-month continuation high of $297.20 on Tuesday, driven by perceptions of a short-term supply squeeze.
The August-October spread, which exceeded $20 on Tuesday, shrank back to around $9 on Wednesday due to the speculative sell-off in August, traders said.
Russian physical raw sugar interest slowed this week, while the refined sugar trade focused on exceptional demand from Sudan and Iraq, traders and freight brokers said on Wednesday.
Brazil crushed 85.1 million tonnes of its record centre-south sugar cane crop by June 15, up 47 percent from the 57.8 million a year ago, the Sao Paulo Cane Industry Union (Unica) said Tuesday.
COFFEE WEAKENS:
Liffe robusta futures finished negatively on Wednesday after a weak performance on the New York market dented sentiment in London, traders said.
London's most-active September finished down $7 at $1,231 a tonne, while spot July closed down $1 at $1,203.
September coffee peaked at $1,250 a tonne in early trade on a bout of speculative buying but stopped well short of its high for the month of $1,333, the firmest level for a second position since December 1999.
"It perked up a bit ahead of New York but then that was disappointing and it came down again," a dealer said, adding that London could weaken further.
"It could come down very easily, it came up in very thin volume," he added, referring to Tuesday's three-percent jump.
Traders said activity on Wednesday was dominated by July/September spread business. The spot month shifted 4,014 lots while September moved 3,463 lots. Total volume was 8,242 lots.
Traders expected the robusta market to remain choppy over concerns about drought damage to crops in Vietnam and further fund liquidation on the New York market.
COCOA FLAT:
London's cocoa prices finished barely changed on Wednesday and looked set to resume their sideways trend after a recent short covering rally, traders said.
Liffe's benchmark September concluded at 863 pounds a tonne, down one pound. It touched 850 - the weakest price since June 14 and made an intra-day high of 870.
Volume on the contract was 3,463 lots out of a total of 8,242.
Cocoa is approaching its previous range after backing down from a two-month high of 911 touched earlier this month.
"It seems to be treading water. The market has not got underlying support. As with other markets at the moment, if funds move away and trade doesn't want to follow it backs down," a dealer said.
Dealers were sceptical about another disarmament agreement between warring foes in Ivory Coast.
Opposing sides agreed to begin disarming immediately and to complete the process by Aug. 20, moving towards elections, a communique said on Wednesday after two days of talks in Pretoria.
In news from other producer countries, Brazil's 2005/06 (May/April) cocoa arrivals from Bahia and other states totalled 1,067,627 60-kg bags by June 26, up 221 percent from 332,185 bags a year ago, Bahia Commercial Association said Wednesday.
Comments
Comments are closed.