Raw sugar slumps to one-year low

Raw sugar futures on ICE fell to a one-year low on Wednesday, with the benchmark contract attracting its heaviest volume to date as traders eyed an improving 2017-18 crop outlook and automatic sell orders were triggered below 16 cents per lb. July raw sugar settled down 0.71 cent, or 4.4 percent, at 15.57 cents per lb, just above the session low of 15.52 cents, the weakest for the second position since April 28, 2016.
July volume surged to 114,762 lots, by far the largest for the contract in a single session, as the price made its biggest one-day tumble in nearly seven months.
Dealers said the market was weighed by the prospect of a global surplus in the upcoming 2017-18 season (October/September) with forecasts for its size steadily increasing.
Sell-stops were triggered around 16 cents per lb, a level viewed as support, traders said, adding that technical selling was a major source of the session's weakness.
May futures settled down 4.9 percent at 15.38 cents per lb, the lowest in nearly a year on a continuation chart, ahead of contract expiry on Friday.
The May discount to July widened to as much as 0.24 cent, the weakest since its first day of trade in August 2014.
"Upward revisions to production forecasts well outnumber downward revisions. And an Indian summer of imports looks less and less likely," analyst Tobin Gorey of Commonwealth Bank of Australia.
China is considering special import duties on sugar as part of an anti-dumping probe, according to two people familiar with the matter.
"Don't expect China to come in and buy the market," said one US trader, noting another bearish influence.
August white sugar settled down $15.70, or 3.4 percent, at $453.30 per tonne, also a one-year low.
July arabica coffee settled down 1.7 cent, or 1.3 percent, at $1.307 per lb, after falling to a 10-1/2-month low at $1.3015 as the chart continued to weaken technically.
"We were surprised at the (recent downward) move and given no change in fundamentals, we remain bullish. If anything, the continuous dryness in Brazil's main coffee areas could worsen the conversion rate (of cherries to green beans)," Rabobank said in a report.
July robusta settled up $13, or 0.7 percent, at $1,929 per tonne, following five straight sessions lower.
July London cocoa settled up 23 pounds, or 1.6 percent, at 1,473 pounds per tonne. July New York cocoa settled up $23, or 1.2 percent, at $1,875 per tonne.