Sugar steadies

Raw sugar futures on ICE stabilised on Wednesday with talk that Indian authorities could soon launch raw sugar export incentives capping gains, while forecasts for rain in top grower Brazil weighed on arabicas. Cocoa futures dipped to a one-year low as dealers digested worse than expected fourth-quarter grind data, a measure of demand, from Europe, North America and Asia, published earlier this month.
March raw sugar was down 0.02 cents, or 0.1 percent, at 15.14 cents a lb at 1452 GMT. It closed on Tuesday well above 15 cents after falling 2.7 percent to a session low at 14.93 cents on India concerns. "Here we are again hovering in no man's land," said Thomas Kujawa, co-head of the softs desk at Sucden Financial Sugar. "Perhaps some destination offtake interest will be provoked considering the market has dropped over a cent in five sessions."
March white sugar was down $3.00, or 0.8 percent, at $391.00 a tonne. Dealers said talk that Indian authorities could introduce raw sugar export incentives soon to help financially strapped mills and to reduce high inventories was casting a pall over the market. Concerns about the risk of dry weather in top grower Brazil helped underpin prices, although some rainfall was forecast in the near term. "We now might be in for a tedious range for a bit. At the moment the funds are frightened to go much shorter," said Michael Liddiard of consultancy Agrilion. "Producers are happy to wait for 15.50 cents or 16 cents (to sell)."
Forecasts for rain in Brazil weighed on arabica coffee futures. Rains that broke up a hot, dry air mass over Brazil's coffee belt last week will intensify into mid-February, but only below-average accumulations are likely over the next two weeks, according to Reuters weather data on Tuesday. ICE March arabica was down 1.25 cents, or 0.7 percent, at $1.6695 per lb. March robusta coffee was down $10, or 0.5 percent, at $1,977 a tonne. "On the downside, modest declines could initially falter near the key level of $1,900, while support holds near January's low of $1,858," said Myrto Sokou, senior research analyst with Sucden Financial. ICE March cocoa was down $18 or 0.7 percent to $2,725 per tonne, having earlier touched a one-year low of $2,723, while London May cocoa was down 9 pounds or 0.5 percent to 1,884 pounds per tonne.