Liffe sugar lower

Liffe August white sugar ended $1.20 lower at $770.10 a tonne on Wednesday. Market retreated from the prior session's contract high with prices weighed by China sales as well as macroeconomic concerns after China raised interest rates and Portugal's credit ratings were downgraded.
Liffe September cocoa ended 13 pounds ($21) lower at 2,010 pounds a tonne, also weighed down by a pullback in commodity markets as economic concerns heightened risk aversion among investors. Liffe September robusta coffee ended $1 higher at $2,466 a tonne. Market continues to consolidate following sharp rise in late June. China sold all the 250,000 tonnes of sugar it offered for sale on Wednesday in the sixth round of auctions during the 2010/11 crushing year that started in October, an industry website reported.
"The sale shows that the Chinese are not desperate for imports at the moment," one London sugar futures dealer said. Brazil's Unica industry group was expected to cut its estimate of the cane crush and production in the world's top sugar grower. The report is due out next week. Sugar merchant Czarnikow on Wednesday revised down by 40 million tonnes its forecast for 2011/12 centre-south Brazilian cane output to 535 million tonnes, less than last year's 557 million tonnes. Brazilian industry group Datagro has forecast centre-south output at 536 million tonnes.
"We continue to expect a correction to the current rally. Prices are high so are not likely to attract end user interest," said Nick Penney of brokerage Sucden Financial. "Managed funds hold the largest net long position since early March and we believe the expectation of a lower Unica crop forecast is already in the price." Dealers kept a close eye on Brazil's weather forecasts after a frost in a minor coffee-growing region caused a jump in prices last week.
"The (arabicas) balance sheet through the end of calendar year 2011 is undeniably tight, but this is known and is arguably in the price already," commodities brokerage Marex Spectron said in a market comment. Marex estimates world 2011/12 cocoa production will fall to 3.844 million tonnes, after favourable weather in West Africa led to record output the previous year, it said in a report on Wednesday.