Liffe sugar falls

May white sugar ended $6 lower at $483.00 per tonne on Wednesday as traders focused on the start of harvesting in the centre-south of top producer Brazil. May robusta coffee ended down $18 at $1,345 per tonne, pressured by a firm dollar, against a backdrop of plentiful robusta supplies. Dealers noted concerns over the potential impact of prolonged dry weather on robusta crop development.
July cocoa on Liffe settled 39 pounds lower at 2,167 pounds a tonne. The market awaited clearer indications on whether demand is likely to recover this year after falling in the first half of 2009 as the global economic downturn gathered pace. European Q1 grind data is due on April 13. Earlier, ICE raw sugar futures inched up on light investor buying on Wednesday as the market focused on output risk for top producer Brazil after recent rainfall.
Cocoa futures fell pressured by a firm dollar, with traders looking forward to key first-quarter demand data due later this month, while coffee was little changed with attention centred on the impact of dry weather in Southeast Asia on crop development. In sugar, dealers focused on the start of harvesting in the centre-south of Brazil. "The market is pricing in very good harvests in (top producers) Brazil and India," said Jake Weatherall, a soft commodities trader with Rabobank.
Dealers said the recent rains at the start of sugar harvesting in the centre-south of Brazil could become a market factor if the wet weather persisted. "The market is saying, there is no shortage of raw sugar at the moment," Weatherall said. Raw sugar futures have lost almost half their value in the past two months since hitting a 29-year peak of 30.4 cents a lb on February 1 as cash buyers stick to the sidelines.
Investors and dealers expect prices to fall further, but most are looking for a re-entry point, citing strong physical demand from May onwards as a source of support. European first-quarter grind data, a key measure of demand, is due on April 13. One London-based cocoa futures trader said he anticipated that the Q1 European grind would be up 5-10 percent compared with the same period a year ago, signalling moderate growth from the disappointing early start in 2009.