Raw sugar prices on ICE fell on Wednesday for the third straight session as a fund short-covering rally ran out of steam and as corn prices retreated, while arabica coffee edged up off a three-week low. October raw sugar settled down 0.09 cent, or 0.7%, at 12.74 cents per lb.
Prices had risen in the first half of this month on a short-covering rally against the backdrop of dry weather in India, a top sugar grower, and surging corn futures. Both corn and cane are feedstock for ethanol.
French sugar trader Tereos for the first time used a new rail system developed through a partnership with local logistics company VLI to ship raw sugar cargo out of Brazil, Tereos said on Wednesday.
Dealers noted that July open interest remained large, which could indicate a large physical delivery upon the contract's expiry at the end of this month.
August white sugar settled down 90 cents, or 0.3%, at $332.70 per tonne.
September arabica coffee settled up 1.35 cent, or 1.4%, at 97.95 cents per lb, after earlier falling to a three-week low of 96.25 cents. Total open interest fell for the fourth straight session on Tuesday to 280,465 lots, its lowest since Jan. 11.
"People are liquidating their positions... you don't really want to be short coffee coming into the winter, into the frost season (in Brazil)," said one US trader.
First notice day for the July contract is Thursday, also prompting traders to roll out of or liquidate their positions.
September robusta coffee settled unchanged from the previous session, at $1,372 per tonne.
September New York cocoa settled up $13, or 0.5%, at $2,513 per tonne.
September London cocoa settled up 4 pounds, or 0.2%, at 1,854 pounds per tonne.
Both contracts hit 11-month highs last Wednesday as top growers Ivory Coast and Ghana announced plans to set a floor price for cocoa. A
"No one knows how this Ivory Coast and Ghana (price floor) will work, or how the differentials are going to work. There's still a lot more that has to come out before people can get a grasp of whether it's bullish or bearish," said one US trader. Traders, manufacturers, and processors requested a technical meeting on July 3 to address details as to how the price floor would be implemented.
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