Sugar plunges

ICE raw sugar futures made their biggest two-day tumble in three months on Wednesday, with dealers focused on a global surplus of the sweetener and on the progress of the harvest in Brazil, while a broad decline in commodity markets added to downward pressure.
Arabica coffee also fell as commodity markets extended this week's setback with the Thomson Reuters-Jefferies CRB index falling more than 1 percent to a two-week low as Brent crude oil prices slid to a six-week low. ICE October raw sugar futures fell 0.48 cent, or 2.5 percent, to end at 18.96 cents per lb, drifting down towards a two-year low of 18.81 cents touched on September 6. The move lower extends the previous session's losses, causing the contract to drop 5.3 percent in the past two days, the biggest two-day fall since June 22.
Dealers anticipate a large global sugar surplus, which is weighing on prices, and are focused on harvesting in Brazil and in the northern hemisphere. "The weather in Brazil will be a key determinant to watch, to see whether or not production can catch up after a delay at the start of harvesting," Stefan Uhlenbrock, a senior analyst with F.O. Licht, said. Standard Chartered said in a sugar market report that raw sugar's support near 18-20 cents per lb appears vulnerable.
December white sugar on Liffe fell $11.30, or 2 percent, to finish at $552.00 per tonne. In arabica coffee, ICE December dropped 3.10 cents, or 1.8 percent, to finish at $1.7440 per lb. "It consistently runs into resistance around the $1.85-$1.90 level," said Spencer Patton, founder and chief investment officer of Steel Vine Investment in Chicago.
November robusta coffee futures closed down $7, or 0.3 percent, at $2,017 a tonne. Cocoa futures were marginally higher in sideways dealings as traders focused on potential disruption arising from top grower Ivory Coast's reforms and the market awaited the publication of the fixed farmer price for the season starting October 1.
There are fears that an unevenly managed reform, which has overhauled the Ivorian cocoa sector and includes a new regulatory body, will cause chaos in its exports as well as increased smuggling of the beans out of the country. ICE December cocoa inched up $6, or 0.2 percent, to settle at $2,538 per tonne, while Liffe December cocoa ended up 9 pounds, or 0.6 percent, at 1,642 pounds per tonne. Traders also looked forward to third-quarter cocoa grind data, a key measure of demand, predicting a subdued outlook.