Raw sugar drops

Raw sugar futures on ICE fell more than 2 percent in heavy volume on Tuesday, on forecasts for rain in top-grower Brazil and expectations that India will approve a new export subsidy, while New York cocoa bounced up from a one-year low. Technical buying and short-covering lifted arabica coffee futures nearly 4 percent. Raw sugar futures fell on forecasts for much-needed precipitation in parts of Brazil's growing regions.
Traders noted expectations that India, the world's second-biggest producer, could soon increase its raw sugar export subsidy as the government moves forward with a plan. "Physical values have been bleeding and destination values are even worse which shows there is plenty around," a European broker said.
March raw sugar settled down 0.19 cent, or 1.2 percent, at 15.16 cents a lb, closing well above the psychological 15-cent level after falling 2.7 percent to the session low at 14.93 cents. March white sugar finished down $3.80, or 1 percent, at $394.00 a tonne. Cocoa futures were mixed as the market continued to respond to weak grind data, implying falling demand in key regions, and strong bean arrivals in top-grower Ivory Coast.
New York March cocoa closed up $6, or 0.2 percent, at $2,743 per tonne, as the market was viewed as oversold after inching down to $2,728, the lowest for the spot contact since January 2014. London May cocoa ended down 6 pounds, or 0.3 percent, at 1,893 pounds per tonne. CME Europe said it planned to launch a euro-denominated cocoa futures contract on March 30, days before rival ICE Futures Europe introduces a similar contract.
Arabica coffee jumped late in the session on short-covering after the market failed to make a new low and on talk that supplies in top-grower Brazil may be running thin after a months-long selling spree. "The market's short-term oversold. We made a new low and $1.5790 was a technical objective and we haven't achieved it, so the market's going to try to pick itself up again," said Nick Gentile, managing partner of commodity trading advisor NickJen Capital in New York. ICE March arabica closed up 6.35 cents, or 3.9 percent, at $1.6820 per lb. March robusta coffee finished up $35, or 1.8 percent, at $1,987 a tonne.