London white sugar futures closed down almost two percent on speculator and trade sales in moderate volumes on Wednesday, and dealers said the market felt vulnerable to further selling pressure. October settled down $5.40 or 1.89 percent at $279.60 per tonne in volume of 1,772 lots, having moved from $284.80 to $279.20.
December concluded down $4.60 or 1.67 percent at $270.40 in volume of 71 lots after trading from $274.50 to $270.50.
"The market has drifted off. There is not a huge volume. The feeling is that the specs are far too long of the market," a trader said.
Some traders referred to a perception that physical sugar demand was about to fall.
They mentioned reports that India is unlikely to import raw sugar in the new crop season beginning October, adding that the window of opportunity for further Indian buying now looked very tight.
COCOA LOWER: London cocoa futures closed lower in moderate volume on Wednesday, with markets participants waiting for fresh fundamental news, traders said.
Liffe's front-month September contract fell nine pounds to settle at 856 pounds per tonne after hitting a new three-week high of 878 earlier in the session.
It made an intra-day low of 854 pounds and had turnover of 4,050 lots. Total turnover was 8,809 lots.
"The market is devoid of any real fresh news," a trader said. "There could be a tentative move to the upside. You can't discount turmoil in Ivory Coast but in 2002 we had a coup and the crops still came out."
Another trader said fund buying combined with weak origin selling pressure could push up prices again.
"The 2005/06 main crop reportedly is still looking good, but it is the 'silly season' and the market could remain volatile," the trader said.
COFFEE STEADIES: London coffee prices struggled up from a fresh three-month contract low to finish little changed on Wednesday but dealers expected further declines after a 9.8 percent fall in the previous session, dealers said.
Liffe's benchmark September ended $4 stronger at $1,081 a tonne, off the day's high of $1,093. Earlier it touched $1,060 - the lowest price since April 22.
Overall volume was 21,774 lots, almost half of which came from September trade. Spread activity on contracts further forward also contributed to volume.
"There's still an element of nervousness. A major amount of bloodletting was done but you can't discount some of the system funds going short," a trader said.