White sugar extends losses to 2-1/2-year low, arabica coffee down

White sugar futures on ICE extended losses to a 2-1/2-year low on Friday, while arabica coffee fell to its weakest point in 9 months as expectations for abundant global supplies pressured both markets. May white sugar settled down 70 cents, or 0.2 percent, at $348.30 per tonne, after slipping to $346.20 per tonne, the weakest for the front month since September 2015.
Prices remained under pressure from expectations for a global supply glut, mainly due to sharply higher output in India and Thailand. "The Thai crop is constantly being refreshed higher, both in terms of cane and sugar numbers," Marex Spectron said in an update. May raw sugar settled down 0.09 cent, or 0.7 percent, at 12.65 cents per lb. It closed the week down 1.5 percent, its straight week lower.
The market remained under pressure from light speculative selling and concerns about excess supplies, though dealers said they viewed 12.5 cents as strong technical support. Funds were expected to have extended their bearish stance to a new record this week, which could pave the way for short-covering, though producer hedging could prevent strong gains, dealers said. "Any move lower is probably going to be by producers losing patience and bringing selling to market," said one dealer. "So it's kind of a game of cat and mouse between the funds and the producers."
May arabica coffee settled down 0.7 cent, or 0.6 percent, at $1.1805 per lb, after tapping the lowest since June at $1.169. It closed the week down for the second straight week. Prices extended lower on speculative short-selling and technical sell signals after falling below session lows made in December and February, and pressure from expectations for surplus production, traders said.
US green coffee stocks dropped for the seventh straight month in February to 6.5 million bags, holding slightly above year-ago levels but inventories were still historically high, data showed late Thursday. May robusta coffee settled up $17, or 1 percent, at $1,745 per tonne. May New York cocoa settled down $14, or 0.6 percent, at $2,522 per tonne. It closed the week up 1.8 percent, rising for the 11th week out of the past 12.
May London cocoa closed flat at 1,796 pounds a tonne. It closed the week higher for the eighth straight week. Both markets consolidated after rallying to multi-month highs and technically overbought levels this week, boosted by speculative buying against a backdrop of more modest West African output.