White sugar futures fell on Tuesday, pressured by a stronger US dollar and a looming global supply glut, while arabica coffee extended last week's losses to reach its lowest in more than two months. May white sugar settled down $3.60, or 1 percent, at $357.90 per tonne, remaining within the range held the past month.
The market was under pressure from a stronger US dollar and ample supplies due to strong production in India, Thailand and the European Union this season, traders said. However, participants said they were closely monitoring weather in the EU amid signs of an approaching cold snap that could hurt crops.
"Notably, an increased number of frost days are expected over the European continent as temperatures are forecast to plummet," Marex Spectron said in a note. May raw sugar settled up 0.01 cent, or 0.1 percent, at 13.29 cents per lb.
The March premium over May fell to 0.07 cent, from 0.1 cent on Friday, but maintained a premium on the possibility of fewer available supplies for delivery ahead of expiry at the end of the month. May arabica coffee settled down 0.75 cent, or 0.6 percent, at $1.197 per lb, after falling to $1.195, the second-position contract's lowest since Dec. 13.
The market's 3 percent drop on Friday, when selling ahead of first notice day for the March contract on Tuesday pressured prices, triggered chart-based sell signals as prices extended losses below long-term moving averages and recent session lows, traders said. "The chart looks pretty ugly and the speculators covered a fair bit more than the market had thought," one dealer said. "So they have scope to sell."
The spot arabica premium over robusta fell to 36 cents per lb, the lowest in nearly four months. May robusta coffee settled up $29, or 1.7 percent, at $1,770 per tonne, after touching $1,733, its lowest since Jan. 31.
The March robusta premium over May rose to $43, the highest for the contract. May London cocoa settled up 12 pounds, or 0.8 percent, at 1,516 pounds per tonne, after rising to 1,517 pounds, the highest since Nov. 30.
May New York cocoa settled up $14, or 0.7 percent, at $2,148 per tonne. The market shrugged off expectations for a global surplus, as bean arrivals at top grower Ivory Coast ports neared year-ago levels, as focus shifted to quality concerns following hot weather in most Ivorian regions, traders said.
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