Sugar steadies, cocoa dips

Raw sugar futures on ICE steadied on Tuesday on spread trading ahead of the March contract's expiry, while New York arabica coffee and cocoa eased under pressure from a stronger dollar. ICE March raw sugar futures traded down 0.01 cent, or 0.1 percent, at 14.81 cents per lb at 1529 GMT.
The March/May spread rose to a 0.16 cent premium, from a 0.06 cent discount at Friday's settlement, on perceptions of tight nearby supplies. The spread trading boosted volume as index funds rolled over positions, traders said. The March contract expires on February 27. "March is trading over May due to limited availability of raws for prompt shipment," said Tracey Allen, commodities analyst with Rabobank.
Market talk of Chinese buying of Central American sugar helped underpinned prices. March white sugar futures slipped 0.7 percent, or $2.70 to $384.10 per tonne on light, chart-based dealings under pressure from a stronger dollar. The March white sugar futures contract expires on Friday. "Talk around the market is that only a small quantity (under 100,000 tonnes) of Central American whites is potentially deliverable," said Nick Penney, senior trader with Sucden Financial Sugar.
Another European trade source said some 70,000 tonnes of Central American sugar could be delivered against the tape. "In Guatemala, refined sugar production is higher on the year, while raws production is a touch lower, and demand for refined is not as strong as for raws," the trade source said. Most-active May New York cocoa on ICE traded down $11, or 0.4 percent, at $2,855 a tonne, on weak demand prospects after worse than expected grindings data from Europe, North America and Asia.
"A resumption of losses in breach of $2,800 could see further moves on the downside test levels towards the 10-day moving average at $2,737 while protracted declines would look to test tentative support around $2,700," said Kash Kamal, research analyst with Sucden Financial. May London cocoa futures were down 16 pounds, or 0.8 percent, at 1,961 pounds a tonne.
Arabica coffee edged lower, under pressure from the stronger dollar. A firmer greenback makes dollar-denominated commodities more expensive in terms of other currencies. March arabica coffee futures were down 3.55 cents, or 2.1 percent, at $1.6405 per lb. May robusta coffee traded up $7, or 0.4 percent, at $1,984 a tonne.