Raw sugar springs back, cocoa gains

Raw sugar futures on ICE edged up on Monday as a technically oversold market steadied after sinking nearly 6% last week, while cocoa prices hit their highest in more than a week. October raw sugar was up 0.03 cents, or 0.3% at 11.62 cents per lb at 1405 GMT. The contract plunged nearly 5.8% last week in the front-month's worst weekly performance in 1-1/2 years.
Speculators on ICE Futures US increased their net short position in raw sugar in the week to July 16 to a five-week high. "The market remains oversold. A corrective rally could be seen but it is unlikely a full-blown rally will develop at the moment," said a dealer. Oil prices rallied on concerns that Iran's seizure of a British tanker may lead to supply disruptions. Stronger energy prices can encourage cane mills to produce more ethanol at the expense of sugar.
Still, sugar prices remain under pressure amid excess global stocks and after a large amount of white sugar from Thailand was delivered against the August contract last Tuesday, indicating weak demand. In news, the European Union's crop monitoring service, MARS, cut its yield forecast for the EU 2019 crop to 73.9 t/ha from 75.7 t/ha last month.
October white sugar was up $0.30, or 0.1%, at $316 a tonne. September London cocoa rose 26 pounds, or 1.4%, to 1,931.25 pounds a tonne, having earlier hit $1,908, its highest in more than a week. September New York cocoa was up $49, or 2%, at $2547, having earlier hit $2,557, its highest in more than a week.
Speculators cut their net long position in New York cocoa by 8,849 contracts in the week to July 16. A dealer said market fundamentals were roughly balanced and that prices were consolidating at these levels. Last week saw strong data on cocoa grinds, an indicator of demand, from North America and Asia, but weak readings from Europe. Rains were below average last week in most of Ivory Coast's cocoa-growing regions.
September arabica coffee was down 0.7 cents, or 0.6%, at $1.1050 per lb, having hit its highest in two weeks at $1.1190. Speculators increased their bearish stance in Arabica by 3,060 lots in the week to July 16. "After shipping a record 41.1m bags in the 2018/19 crop year, Brazil has started 2019/20 at the same rate. The country will export 3.3m bags in July," said Marex Spectron in a note. September robusta coffee was down $17, or 1.2%, at $1,402 a tonne.