ICE raw sugar futures dropped Tuesday in heavy, spread-related trade, and ICE cocoa eased but still notched a sixth straight quarterly gain driven by strong demand. Arabica coffee on ICE Futures US rose on lingering concerns over drought-related crop damage in top grower Brazil. ICE October raw sugar futures closed down 0.18 cent, or 1.1 percent, at 15.48 cents a lb.
The March ICE raw sugar contract fell 0.35 cent, or 2.1 percent, to settle at 16.45 cents a lb after gaining for the previous five sessions. The October contract fell as much as 1.34 percent in the final hour of trading in spread-related dealings that brought the spot contract's discount to the second-month to below 1 cent. The narrowing of the spread may have brought more Brazilian sugar to be sold, said Michael McDougall, a senior vice president for brokerage Newedge USA in New York.
Following market close, traders said they expected Bunge Ltd to be the sole buyer of sugar of 528,655 tonnes of raw sugar from Brazil, Thailand and El Salvador against the October contract. Spot raw sugar on ICE finished the third quarter down 6.9 percent on abundant supplies and light demand. Liffe December white sugar closed down $9.80, or 2.3 percent, at $422.30 a tonne.
December arabica coffee futures on ICE closed up 2.1 cents, or 1.1 percent, at $1.9335 per lb as dealers weighed up the impact of drought on production in top grower Brazil. Brazilian supplies are ample after a build-up in stocks since 2012/13, but supply is expected to tighten in 2015/16 due to the worst drought in decades. Front-month arabica coffee closed the third quarter up 11.8 percent.
"There is still a degree of concern as we enter the new crop development stage and what that outturn will be," said Stephen Platt, a futures specialist with Archer Financial Services. Liffe November robusta coffee futures closed up $29, or 1.5 percent, at $1,992 per tonne. ICE December cocoa eased $11, or 0.3 percent, to settle at $3,300, slipping further from last week's 3-1/2 year high of $3,399 as the momentum of a speculator-driven rally cooled.
Even so, the spot contract rose almost 5 percent in the third quarter, as investors have piled in amid fears that Ebola could spread to top-grower Ivory Coast. The sixth straight quarterly gain marked the front-month's longest such streak since rising for eight straight quarters between 1975 and 1977. Liffe March cocoa closed down 3 pounds, or 0.1 percent, at 2,072 pounds a tonne.
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