Raw sugar and arabica futures fell in heavy volume on ICE on Tuesday, with sugar hitting a six-year low, hurt by renewed weakness in Brazil's currency, while cocoa turned higher on a flurry of late-day buy orders. Brazil's currency, the real, strengthened against the dollar on Monday and early on Tuesday, but the rally proved short-lived and attracted speculative selling. The real remained near Friday's 12-year low.
"The main story is still in place that the weak real is pushing down prices of soft commodities, especially arabica coffee and raw sugar," Commerzbank analyst Michaela Kuhl said.
Brazil is the top producer of both arabica coffee and sugar. System funds have been selling both commodities whenever the currency drops. A weak real also means growers in Brazil are to some extend shielded from the fall in international prices.
Raw sugar futures were lower with May closing down 0.29 cent, or 2.3 percent, at 12.45 cents a lb, after falling to 12.36, the lowest level for the spot contract since April 2009.
Total open interest jumped nearly 11,000 lots to 886,036 lots on Monday, the highest level since September 2014, exchange data showed.
May white sugar fell $4.10, or 1.1 percent, to close at $364.80 a tonne.
In coffee, May arabica futures settled down 4.55 cents, or 3.2 percent, at $1.373 per lb, having dealt in a wide 9.25-cent range.
Robusta coffee futures turned lower with May ending down $20, or 1.1 percent, at $1,818 a tonne.
Some dealers said the robusta market was underpinned by talk that Brazil's conillon (robusta) crop may be smaller than expected this year and concern about dry weather in Vietnam, but one analyst downplayed those concerns.
"There are dry areas (in Vietnam) and there are also areas with humidity in the region, these are normal conditions," said independent analyst Nguyen Quang Binh.
Cocoa futures settled higher after a dramatic change in direction just ahead of the settlement window. May New York settled up $26, or 0.9 percent, at $2,783 a tonne, after buy stops were triggered above the prior session's highs and volume surged in the five minutes leading up to the settlement.
May London cocoa closed up 28 pounds, 1.5 percent, at 1,948 pounds a tonne.
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