Raw sugar and arabica coffee futures on ICE fell on Monday, undermined by oil prices falling to their lowest in more than 11 years, and a weaker Brazilian currency. Robusta coffee was steadier but was under pressure from an ample harvest in Vietnam and a big carryover from the previous crop, while New York cocoa eased, weighed down by a weak pound and higher-than-expected weekly Ivorian bean arrivals data.
Raw sugar futures fell in a technically driven correction after Friday's rally, and were dented by soft physical demand and the weakening oil price, dealers said. They cited reports that a number of mills were still harvesting cane in centre-south Brazil. "The mills need the cash. There is no shortage of cane," one dealer said. Michael Liddiard of consultancy Agrilion estimated that around one-third of mills in centre-south Brazil were still operating, compared with less than 10 percent at this time of year in a typical season.
March raw sugar futures on ICE were down 0.23 cents, or 1.5 percent, at 14.87 cents per lb at 1519 GMT. March white sugar was down $4.90, or 1.2 percent, at $408.80 per tonne. Arabica coffee futures eased, pressured by the stronger dollar against the euro and pound, and the weaker Brazilian real.
A weak real boosts incentives for Brazilian producers to lock in returns from sales of dollar-denominated coffee and sugar. Traders were keeping a close watch on rainfall in Brazil's main growing regions. March arabica coffee was down 0.9 cents, or 0.8 percent, at $1.1810 per lb, while March robusta coffee was up $4, or 0.3 percent, at $1,517 per tonne.
"Momentum indicators still hint towards near-term downside pressure and we could see futures struggle to push significantly higher over the coming sessions," said Kash Kamal, a senior research analyst with Sucden Financial Research. New York cocoa edged lower, undermined by sterling weakness. March New York cocoa on ICE was down $21, or 0.65 percent, at $3,231 per tonne.
March London cocoa was down 15 pounds, or 0.7 percent, at 2,242 pounds per tonne. Exporters estimated around 69,000 tonnes of beans were delivered to the West African state's two ports of Abidjan and San Pedro between December 14-20, down from 74,000 tonnes during the same period last year. "It's a pretty chunky number," one London-based broker said. "It's having a slightly negative effect on the market.
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