Cocoa, sugar slip

Cocoa futures on ICE sank around 3 percent on Thursday, marking their biggest one-day tumble in two months as the spot London spread weakened sharply ahead of first notice day and triggered automatic sell orders. Raw sugar dropped 2 percent after center-south Brazil's cane crush for late November exceeded market expectations and the market was pressured by a stronger dollar. Arabica coffee nudged down to a 4-1/2 low while robusta dropped for the sixth straight session.
The firmer greenback makes dollar-denominated commodities more expensive in other currencies. London March cocoa settled down 56 pounds, or 2.9 percent, at 1,882 pounds a tonne, its biggest fall since October 1, while the December/March spread narrowed to 33 pounds intraday, from a 60-pound settlement on Wednesday. First notice day for December is Monday.
New York March cocoa finished down $79, or 2.7 percent, at $2,854 a tonne, the biggest one-day drop in two months. "London December/March weakened and it looks like trailing sell-stops on the way down," one veteran US cocoa trader said, noting sell stops were triggered in both the London and US cocoa markets. Raw sugar futures on ICE fell more than 2 percent after Brazilian cane industry group Unica said 15.7 million tonnes of cane were crushed in the second half of November. Traders had expected a crush of some 14-15 million tonnes.
"The cane figure and yield were higher than the market estimates," said Ana Carolina Ferraz, analysis manager with commodities house Czarnikow. Dealers said they saw additional bearish pressure from expectations that India could soon introduce raw sugar export incentives to help mills sell surplus stocks, and from signals that Chinese authorities could be trying to discourage imports.
Chinese refiners have agreed to limit out-of-quota imports to 1.9 million tonnes next year. March raw sugar closed down 0.32 cent, or 2.1 percent, at 15.15 cents a lb. March white sugar ended down $5.50, or 1.4 percent, at $393.30 per tonne. Arabica coffee on ICE fell, pressured by the strong US dollar and expectations for sizeable selling by indices in early January, traders said. March arabica coffee finished down 2.15 cents, or 1.2 percent, at $1.7640 per lb, having touched a 4-1/2-month low of $1.7490 per lb. March robusta coffee fell $32, or 1.6 percent, to end at $1,965 a tonne.