Coffee, cocoa and sugar futures fell on Wednesday as US data indicated economic growth may be slowing more than expected, analysts said. Investors dumped US stocks and the dollar, crude slid by up to 1.0 percent and safe-haven buyers flocked to gold as it rose nearly 1.0 percent.
The softs complex was hit by "outside market type" liquidation which deflated sentiment in the sugar, coffee and cocoa markets, said Sean McGillivray, head of asset allocation in Great Pacific Wealth Management in Oregon. New York's July arabica coffee contract dropped 8.65 cents to close at $2.5595 per lb, its lowest settlement since February 11. It was the biggest one-day loss for the market since May 4.
The market was also pressured by news from Telvent DTN of near to above normal temperatures in top grower Brazil at a time when the country's coffee crop could potentially see a damaging frost. Coffee prices are set to remain high though, as increased maintenance and fertiliser use will not boost production enough to match growing demand.
White sugar futures outpaced gains in raws due to firm North African and Middle Eastern physical demand for refined sugar before Ramadan, dealers said. New York's July raw sugar contract fell 0.72 cent to end at 22.46 cents per lb. It was the biggest one-day loss for the market since May 11. Cocoa prices eased with the release of Ivory Coast stocks weighing on the market after months of stalled trade in the world's top producer.
New York's July cocoa contract fell $46 to finish at $2,953 per tonne. Tight US supplies of cocoa beans from traditional source Indonesia have also helped tighten the difference between the London-based NYSE Liffe market and New York-based ICE cocoa futures prices, which are usually significantly lower.