Raw sugar futures on ICE were marginally lower on Monday as weakness in energy and global equities kept the market on the defensive while coffee and cocoa prices rose. London-based white sugar, robusta coffee and cocoa had an abbreviated session on Monday and will be closed on Tuesday and Wednesday for public holidays.
SUGAR
March raw sugar was down 0.01 cent, or 0.1 percent, at 12.33 cents per lb by 1243 GMT, hovering above a 2-1/2 month low of 12.23 cents set on Friday. Dealers said recent weakness in crude oil prices had helped to put the market on the defensive along with overall weakness in commodity markets linked to concern about slowing global economic growth.
"Fears for global growth remain a focal point in the macroeconomic narrative heading into 2019. U.S. rate hikes remaining in play is supportive of the dollar and all these factors hurt commodities and sugar," broker Marex Spectron said in a report. Crude oil prices were lower on Monday while global equities also fell, weighed by the possibility of a prolonged U.S. government shutdown and a worsening global economy.
Lower energy prices diminish the competitiveness of ethanol in top grower Brazil, bolstering concerns that mills may switch more production from the biofuel back to sugar. Speculators hiked their net short position in raw sugar and increased their bearish stance in arabica coffee on ICE Futures U.S. in the week to December 18, U.S. Commodity Futures Trading Commission data showed on Friday. March white sugar ended $0.10 higher at $337.70 a tonne.
COFFEE
March arabica coffee rose 0.45 cent, or 0.45 percent, to $1.0015 cents per lb. The contract dipped to a three-month low of 98.60 cents last week. Dealers said the harvesting of a huge crop in top producer Brazil this year had ensured the market remained well supplied and could cap any rally in prices. March robusta coffee closed $24, or 1.6 percent, higher at $1,515 a tonne.
COCOA
March London cocoa closed 22 pounds, or 1.3 percent, higher at 1,704 pounds a tonne. Dealers said the market's recent strength had been driven partly by funds scaling back net short positions in London and New York against the backdrop of some concerns that dryness during the annual Harmattan could curb output in West Africa.
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