Raw sugar tumbles, US cocoa at eight-week high

Raw sugar futures on ICE sank more than 3 percent on Wednesday, falling for the first time in five sessions on month-end selling, stemming gains from a four-day rally and weakening the charts technically. New York cocoa prices rose to an eight-week high, buoyed by strength in the British currency against the US dollar and bucking the weak trend in other commodity markets. The 19-market Thomson Reuters CoreCommodity Index fell for the third straight session amid earlier weakness in oil prices.
March raw sugar settled down 0.49 cent, or 3.6 percent, at 13.23 cents per lb. The spot contract closed January down 12.7 percent, its biggest monthly loss in 10 months as the market focused on abundant global supplies.
The session's tumble came after total open interest took a steep two-day dive of 15,610 contracts to 925,960 contracts by Tuesday as prices rallied, after data showed speculators' net short position increased to a record, ICE data showed. The price drop was due to month-end selling, traders said.
The move weakened the spot contract technically, after it failed to rise above the session's opening level at 13.72 cents, traders said.
March white sugar settled down $9.90, or 2.7 percent, at $352.40 per tonne. March New York cocoa settled up $26, or 1.32 percent, at $1,996 per tonne, rising to the highest since Dec. 4 at $2,012.
The move took prices above the 200-day moving average at $1,998. On a continuation chart, the spot contract closed January up 5.5 percent, the strongest monthly performance since July.
March London cocoa settled up 14 pounds, or 1 percent, at 1,399 pounds per tonne. March robusta settled up $34, or 2 percent, at $1,762 per tonne.
Tuesday's weak session attracted roaster buying, boosting prices on Wednesday, traders said. While there was still significant hedging by producers in top grower Vietnam, dealers noted they were reluctant to sell at lower prices, which was also lending support to the market.
March arabica settled down 0.45 cent, or 0.4 percent, at $1.2185 per lb. The spot arabica contract closed January down 3.4 percent, its weakest monthly performance since August. "We expect a record Brazil crop, the question is by how much," the dealer said. "So that's bearish - but at the same time, the funds have a record short position in the market."