Sugar falls, cocoa up

Raw sugar on ICE fell to a six-week low on Tuesday, on late-day selling after being buoyed by stronger oil prices, while cocoa firmed ahead of an expected modest increase in European grind on Wednesday. Arabica coffee futures rose for the third straight day, extending gains above their 100-day moving average. Raw sugar edged up earlier as oil prices hit a five-month high above $44 a barrel, while the market shrugged off industry group Unica's data showing a quick start to the cane harvest in centre-south Brazil.
"The Unica data was as expected, perhaps a bit on the high side, but the market fell so much it looks to have factored in a larger surprise, which did not happen," said Michael McDougall, director of commodities for Societe Generale in New York. Futures prices are down 14 percent from last month's 1-1/2-year peak.
July raw sugar futures settled down 0.05 cent, or 0.4 percent, at 14.34 cents per lb, after falling to 14.32 cents, the lowest since March 2. The May future's discount to July fell to a discount of 0.3 cent, the contract's biggest discount, ahead of expiry at the end of the month, potentially indicating a lack of immediate demand. "As long as it remains dry in centre-south Brazil, the market feels comfortable," an analyst with a trade house said.
ICE August white sugar settled down $1, or 0.2 percent, at $417.20 per tonne. The May contract's price discount against August fell to $6.20, the lowest since June 2015, ahead of May's expiry on Friday. Cocoa firmed as the market awaited first-quarter grind data, a measure of demand, from Europe on Wednesday, expected to be slightly higher. North American grind data is due the following day, with estimates ranging from 1 percent lower to a 4 percent gain. London July cocoa settled up 19 pounds, or 0.9 percent, at 2,179 pounds per tonne. New York July cocoa settled up $31, or 1.1 percent, at $2,963 per tonne.
ICE July arabica settled up 1.05 cent, or 0.8 percent, at $1.263 per lb. May robusta coffee settled up $11, or 0.7 percent, at $1,559 per tonne, with attention centred on erosion of yields at the start of the robusta harvest in Brazil after prolonged dry weather. "The improved trading volumes suggest there is appetite for higher prices; traders could continue to record new highs in the coming sessions," Sucden Financial Research said in a daily report.