Sugar dips, coffee firms on dry weather in Asia, Brazil

Raw sugar futures on ICE eased on Tuesday from a 1-1/2-year peak hit last week while robusta coffee touched a nine-month high supported by concerns over the impact of dry weather in Brazil, Vietnam and Indonesia. New York cocoa hit a five-week low, pressured by weak technical chart signals. Raw sugar futures eased on speculative selling, although prices remained in sight of Thursday's 1-1/2-year high. July raw sugar traded down 0.04 cent, or 0.2 percent, at 16.85 cents per lb at 1338 GMT, remaining in sight of Thursday's high of 17.00 cents.
"There is a danger that the market is overheating and running ahead of itself," said Nick Penney, a senior trader with Sucden Financial Sugar. "We would expect a retracement down to at least the 20-day average of 16.11 cents per lb and would not be surprised to see the 40-day average at 15.70 cents tested once more." Traders said they expected the next Brazilian cane crush data for the first half of May to show some interruptions due to rain.
Brazil's centre-south sugar mills crushed 36.07 million tonnes of cane in the second half of April. Traders said the data, which showed a brisk crush, was broadly in line with expectations. Raw sugar futures rose strongly last week on speculative buying, concerns over dry weather in number 2 producer India, and forecasts for rain in Brazil which could slow the harvest.
August white sugar was down $0.90, or 0.2 percent, at $479.80 per tonne. Robusta coffee futures hit the highest level since August, underpinned by concerns over prolonged dry weather in leading producers in Brazil and Asia. "The coffee market is currently being driven by robusta," Commerzbank said in a note. "It has soared by 27 percent since the end of February because the next crops in the major producing countries of Vietnam, Indonesia and Brazil look set to disappoint amid overly dry weather."
July robusta was $15, or 0.9 percent, higher at $1,701 per tonne, having touched a nine-month peak of $1,707. July arabica was up 0.5 cent, or 0.4 percent, at $1.3410 per lb, after touching $1.3530, the highest since March 23. London July cocoa was down 25 pounds, or 1.2 percent, at 2,132 pounds per tonne. New York July cocoa was down $32, or 1.1 percent, at $2,895 per tonne, after falling to $2,891, the lowest since mid-April.