Sugar and coffee pare losses

Raw sugar futures on ICE were little changed after dropping to a five-week low on Monday, paring losses as oil prices turned higher and the currency in top grower Brazil came off its lows. Arabica coffee prices also pared losses, while cocoa prices bucked the session's weak trend and rose as traders focused on shrinking weekly arrivals in top grower Ivory Coast.
The 19-market Thomson Reuters CoreCommodity Index initially tumbled for the second straight session to the lowest in more than 13 years as oil prices sank near an 11-year trough on growing fears that the global oil glut will worsen. The index recouped losses as crude turned positive. "Energy prices are down and all the markets are focused on this. It gives a headwind," said James Kirkup, head of sugar brokerage at ABN Amro Markets in London, referring to the reason for early market weakness. Dealers said data showing speculators had boosted their net long position in raw sugar to a record high underscored that the market now appeared over-bought. Investors who are net long will benefit when the price of an asset increases.
March raw sugar settled down 0.07 cent, or 0.5 percent, at 14.51 cents per lb, after falling to 14.23 cents, the lowest since November 10. March white sugar futures settled up $2.20, or 0.6 percent, at $401.40 per tonne. Arabica coffee futures saw their second straight day of sharp losses, pressured by the weak Brazilian currency and continued forecasts for rain to aid cherry development in Brazil. Prices, however, came well off lows when larger commodity markets recovered.
ICE March arabica coffee settled down 1.3 cent, or 1.1 percent, at $1.199 per lb. Robusta coffee futures also fell, with January ending down $24, or 1.6 percent, at $1,475 per tonne, dropping for the sixth straight session. Dealers said high stocks in ICE-approved warehouses continued to weigh on prices. London March cocoa settled up 22 pounds, or 1 percent, at 2,300 pounds per tonne. The December contract expired with open interest representing more than 130,000 tonnes as of December 11, exchange data showed, causing traders to expect a relatively large delivery despite the contract's tumble to a record-low 49 pound discount to March, indicating a lack of demand. In Ivory Coast, cocoa exporters are paying high premiums to secure ever scarcer beans. March New York cocoa settled up $22, or 0.7 percent, at $3,375 per tonne.