Raw sugar tumbles, March/May spread narrows

Raw sugar futures on ICE fell sharply from a two-week high on Thursday, on chart-based pressure after failing to hold above the key 21-cent level and weighed down by heavy March/May spreading. London cocoa prices fell to the lowest in more than three years while the New York market flirted with a four-year low, with dealers eyeing defaulted contracts in top producer Ivory Coast.
Robusta coffee made its biggest one-day tumble since December, dropping sharply from the prior session's 5-1/2-year high, as No. 1 grower Vietnam came back to the market after its Tet holiday, and arabica fell to the lowest in more than three weeks.
March raw sugar futures settled down 0.29 cent, or 1.4 percent, at 20.55 cents per lb, after rallying to 21.2 cents, the highest since January 19, which was also a volatile session that saw the market rise then fall sharply.
"It looks like the repeat of January 19th. The (March/May) spread fell and dragged the market down with it," said Michael McDougall, director of commodities for Societe Generale in New York.
The March premium rallied to a 0.27-cent premium over May, but then fell as low as 0.03 cent, amid heavy position rolling ahead of the index roll that is expected to start on Tuesday.
Technically, the 21-cent level was viewed as resistance after the contract has now failed to hold above it three times in the past month, with the 100-day moving average strengthening its significance at 21.03 cents.
May white sugar settled down $3.40, or 0.6 percent, at $546.90 per tonne, as the market continued to monitor top consumer India for signs on whether it would lower import duties.
March London cocoa futures settled up 1 pound, or 0.06 percent, at 1,687 pounds per tonne, after dropping to 1,663 pounds, the lowest since November 2013.
March New York cocoa settled down $25, or 1.2 percent, at $2,084 per tonne.
In coffee, March robusta coffee settled down $58, or 2.6 percent, at $2,185 per tonne, as the market monitored whether tighter robusta supplies will prompt Brazil to import it for the first time in decades.
The Brazilian agriculture minister told Reuters Brazil should allow robusta imports, but the move is strongly opposed by growers and the outcome is uncertain.
March arabica coffee settled down 4.2 cent, or 2.8 percent, at $1.4595 per lb.