London white sugar futures retreated on Thursday under the weight of global oversupply, while cocoa and coffee consolidated in low volumes. London white sugar futures inched lower, pressured by a glut of the sweetener in Brazil and India.
"There is a huge mountain of sugar out there," a trader said. October settled down 30 cents at $278.70 per tonne in brisk volume of 4,197 lots. Dealers noted key support around $272.00. Dealers noted some buying after an EU sugar export tender award of 37,500 tonnes, far below bids totalling 216,500 tonnes, at a maximum rebate of 41.172 euros per 100 kg at Thursday's tender.
Expectations of further exports of Indian sugar dragged on futures prices, dealers said. India's top sugar industry executive S.L. Jain said on Thursday exporters would not sell at rock-bottom prices and that levels near 10 cents per lb seemed viable.
Mexico expects to produce 5.6 million tonnes of sugar in the 2007/08 harvest, the agriculture ministry said on Thursday. London cocoa futures traded in a narrow range, but remained above Tuesday's 6-month lows, after Wednesday's speculative buying triggered by a bullish report on top grower Ivory Coast by independent analyst Hans Kilian.
Dealers said the Kilian report pinpointed a serious outbreak of black pod in the key south-west of Ivory Coast, but the extent of the fungal disease was unclear. December settled flat at 949 pounds per tonne in modest volume of 3,229 lots.
Cocoa dealers said they saw immediate support in December at 931 pounds, the 6-month low touched on Tuesday August 28, and then at 905 pounds.
London cocoa futures prices risk further falls from recent 6-month lows on expectations of a big West African crop, but worries over the wider subprime credit crisis and black pod disease in Ivory Coast muddied the outlook.
Dealers said the price outlook appeared bearish near-term, primarily due to big supplies expected from leading producers Ivory Coast and Ghana, which have had ample rainfall before harvesting of the 2007/08 main crop due to start around October. But reports of black pod disease would be bullish if confirmed on a large scale.
London coffee futures settled little changed as robustas remained well within their recent range, and some speculators remained sidelined because of uncertainty over the subprime credit crisis. The market continued to consolidate just above its recent three-month low of $1,667 a tonne, basis second month. Second-month November finished down $2 at $1,714 per tonne in moderate volume of 6,909 lots.
Dealers said the market could eventually break out of the current range to the downside due to signs a bear flag chart formation was developing. Light origin sales from Indonesia were noted as well as some new crop sales out of Vietnam, the world's top robusta producer.