Robusta coffee futures on ICE slid to a two-month low on Monday, pressured by ample supplies, while sugar prices also fell, tracking a crude oil decline. March arabica coffee settled up 1.05 cents, or 1 percent, at $1.0515 per lb after rebounding off support around Friday's 2-1/2-month low at $1.0385.
March robusta coffee settled down $6, or 0.4 percent, at $1,548 per tonne after touching $1,538 a tonne, its lowest level since early October. Dealers said the harvesting of a large crop in top robusta producer Vietnam weighed on prices.
"I guess we're just dealing with oversupplied markets. When you come down to it, there's nothing on the board that has any real true constructive fundamentals," a US trader said. The International Coffee Organization maintained its forecast for a global coffee surplus of 1.59 million 60-kg bags in the 2017/18 season. March raw sugar settled down 0.15 cent, or 1.2 percent, at 12.72 cents per lb, weakened by a crude oil market decline.
"Sugar is currently following crude oil like a poodle on a short lead," Marex Spectron said in a report. Lower energy prices diminish the competitiveness of ethanol in Brazil, bolstering concerns that mills may switch more production from the biofuel back to sugar. Dealers said the weaker Brazilian currency added price pressure, making sales more attractive in local currency terms.
March white sugar settled down $2.60, or 0.8 percent, at $343 per tonne. March New York cocoa settled down $19, or 0.9 percent, at $2,206 per tonne. "The main driver right now is going to be from those currencies," said Josh Graves, senior market strategist at RJO Futures, noting the recent fall of the British pound.
Sterling hit a 20-month low after Prime Minister Theresa May pulled a parliamentary vote on her Brexit deal with the European Union. Cocoa arrivals at ports in top grower Ivory Coast reached 766,000 tonnes between Oct. 1 and Dec. 9, exporters estimated, up about 31 percent from the same period last season. Meanwhile, Ivory Coast has revoked the licenses of two cocoa exporters that relinquished their contracts after they were denied bank financing, two sources at the country's cocoa marketing board CCC said on Friday. March London cocoa settled up 7 pounds, or 0.4 percent, at 1,638 pounds per tonne, consolidating after a sharp advance on Friday. It earlier hit 1,644 pounds per tonne, its highest level since Nov. 19.
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