Sugar futures fell on Monday, weighed by a large Brazilian cane crop and the prospect of more Indian exports, while cocoa finished at its lowest level in three weeks on technically inspired liquidation. Coffee ended lower, with robusta coffee losses pared by Vietnamese growers holding back supplies near the end of their crop season and the Indonesian coffee harvest looming on the horizon.
New York's May raw sugar contract fell 0.28 cent to finish at 24.68 cents per lb. London May white sugar futures fell $5.60 to close at $647.50 per tonne. "We have a solid Brazilian (centre-south cane) crop," said Country Hedging Inc analyst Sterling Smith, adding the late start to the harvest will eventually be discounted by the market since the supplies will still be plentiful going forward. "Ten days isn't going to matter much." The latest Commitment of Traders report showed a large increase in the speculative long position up to last Tuesday's close. Over the week, funds and speculators combined increased their longs by a net 60,000 lots.
"With such a large increase of the speculative position and momentum somewhat lacking at the moment, we would expect a correction to the downside," said Nick Penney of broker Sucden Financial. Also pressuring prices, India said it can export another 1.0 million tonnes of sugar on top of 2.0 million tonnes permitted so far in the season beginning in October.
Merchant Czarnikow on Monday raised its global sugar surplus forecast for 2011/12 to 7.7 million tonnes, raw value, up from a previous forecast of 6.1 million. Cocoa futures were hit by a wave of investor sales, with New York values weighed by automatic stop-loss sell orders when May dropped below support at $2,300 a tonne.
ICE May cocoa was down $51 or 2.1 percent to end at $2,283 a tonne, the lowest settlement for the second position in three weeks. London's May cocoa futures slid 31 pounds or 2.07 percent to finish at 1,464 pounds per tonne. Smith said: "Cocoa is particularly weak today when it broke below $2,300 and found some stops." Jack Pollard, a technical analyst with Sucden Financial, saw support around 1,458 pounds in Liffe second month cocoa.
Coffee closed easier Benchmark Liffe May robusta coffee futures were $17 lower to close at $2,003 per tonne. May arabicas slipped 0.10 cent to settle at $2.017 per lb, having slipped below the psychological $2 mark to hit an intra-day low at $1.9905.
Coffee buyers will start looking for other supplies if farmers in major producer Vietnam keep holding stocks, while Thai sugar premiums may fall on higher supply at the end of the crushing season, dealers said on Monday. "The market will likely look to Vietnam until selling in Indonesia steps up," Sucden Financial said in a daily market report. Speculators trimmed their net long position on robusta coffee futures and options on NYSE Liffe in the week to February 28 and also cut net shorts in cocoa, exchange data showed on Monday.
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