ICE sugar sinks after data; London cocoa falls

Raw sugar futures on ICE extended losses on Monday, tumbling more than 3 percent to a five-week low after data showed speculators boosted their bullish stance and forecasts for easing rain were seen helping the harvest in top grower Brazil. London cocoa fell from a six-week high as arrivals rose in No 1 producer Ivory Coast, while robusta bounced up from Friday's sharp drop.
Raw sugar futures continued volatile dealings. Prices reached a nine-month high above 15 cents per lb in the week ending last Tuesday, when speculators increased their net long position to a two-year high, government data showed after the market closed on Friday. Prices then fell nearly 7 percent for the rest of last week, but news of the large net long position added to sentiment that the rally had been overdone.
"We have seen a reversal off the nine-month highs, more really led by the stronger dollar, and perhaps the confirmation of a very strong net long position," said Tracey Allen, commodity analyst with Rabobank. The US dollar fell on Monday, after surging in the prior session to its highest level since mid-April. ICE benchmark raw sugar settled down 0.5 cent, or 3.3 percent, at 13.99 cents per lb, after heavy selling triggered sell-stops.
Forecasts for rains to slow down in Brazil's cane belt, enabling the harvest to pick up, also were seen as supportive, traders said. March white sugar settled down $9.20, or 2.3 percent, at $384.60 per tonne. In cocoa, the strong British pound added additional pressure to the London market.
London March settled down 26 pounds, or 1.2 percent, at 2,195 pounds per tonne. New York March cocoa settled down $30, or 0.9 percent, at $3,216 per tonne, with volume more than double the average due to heavy December/March spreading. Robusta coffee futures firmed, supported by concerns over the impact of the El Nino weather pattern on production, pulling arabicas higher. Coffee futures also were supported by the softer dollar, which makes dollar-based commodities cheaper in other currencies, and the forecast for dry weather this week in Brazilian coffee areas. January robusta settled up $21, or 1.3 percent, at $1,625 per tonne, while December arabica closed flat at $1.1775 per lb.