Cocoa steadies, extends technical move out of oversold territory

LONDON: Cocoa prices steadied on Tuesday as the market extended a technical correction, having moved into oversold territory to hit five month-lows earlier this month, while arabica coffee and sugar fell.

COCOA

* December New York cocoa was flat at $2,238 per tonne at 1449 GMT, having hit a two-week peak of $2,279 on Monday.

* Speculators hiked their net short position in cocoa on ICE in the week to Aug. 20 to a three-month high, US government data showed.

* "Their ability to go short has been reduced, it takes away some of the immediate (selling) pressure in the market," a dealer said.

* "We're seeing more trade and possibly more industry interest, and there's the impression of not much (selling from) origin, so that's allowed the market to lift," he added.

* Weather prospects in West Africa continue to improve, however. Above-average rain last week was expected to boost the start of Ivory Coast's October-to-March main crop.

* December London cocoa dipped 1 pound, or 0.1%, to 1,715 pounds a tonne.

COFFEE

* December arabica fell 0.5 cents, or 0.5%, to 97.05 cents per lb.

* Plentiful supplies continue to weigh as the market struggles to absorb Brazil's record-large crop from the current and last season, though weather conditions may take a turn for the worse.

* Brazilian coffee cooperatives said in a statement on Monday that poor weather conditions would negatively affect the 2019 and the 2020 crop.

* Still, a weak Brazilian currency continues to weigh on coffee. The real slid to its weakest against the US dollar in 11 months on Monday, encouraging producer selling of dollar-denominated commodities such as coffee.

* November robusta coffee rose $29, or 2.2%, to $1,343 per tonne.

SUGAR

* October raw sugar dipped 0.2 cent, or 2%, to 11.20 cents per lb.

* Prices have been mostly rangebound in recent sessions, caught between signals of excess near-term supply and longer-term expectations of a deficit.

* The market is also awaiting news from India on the terms under which it will extend its sugar export subsidy.

* Marex Spectron said while it expects the new subsidies will leave Indian exports little changed between 3-5 million tonnes next season, this is nevertheless a bearish factor.

* Indian sugar subsidy policies show that the world's top producer is "intent on keeping production well above consumption even when the world price is as low as it is today", it said.

* October white sugar fell $4.50, or 1.5%, to $306 per tonne.