Raw sugar futures slid to a fresh 5-1/2-month low on Wednesday as bumper Indian supplies, surplus stocks and an increasingly sour economic outlook deflated the sweetener. Coffee and cocoa were mixed as most players remained glum on the poor macro picture. US markets will be shut Thursday for the US Thanksgiving holiday with trading resuming Friday for a shortened session.
Dealers said the latest trigger was one of Germany's worst bond sales since the launch of the euro, which fanned concerns the debt crisis may even start to threaten Berlin. The result helped to send world stocks to a six-week low. "It remains gloomy as European concerns and bearish fundamentals in some commodities, such as sugar and cocoa, continue to weigh on prices," said Country Hedging Inc senior analyst Sterling Smith.
ICE March raw sugar futures dropped 0.35 cent, or 1.5 percent, to close at 23.09 cents a lb, after falling to a 5-1/2 month low at 23.01 cents. London's March white sugar futures on Liffe fell $8.50 to end at $605.40 a tonne. Analysts said definite news on Indian sugar exports and upward revisions in Brazil's crop kept the sweetener on the defensive.
"I am pretty sure it is nearly the end of the downtrend on sugar, around 22 cents that would be the bottom but it (the fall) is more related to macro than commodity news," Lathiere said, noting ongoing production issues in top grower Brazil.
Coffee futures were mixed, with arabicas succumbing to macro economic pressure late in the session. A recent forecast for that production in Colombia, the world's biggest producer of washed arabica beans, will fall to 8 million bags this year, provided some bullish sentiment to the market, dealers said.
The benchmark March arabica coffee contract has dealt in a range between $2.24-$2.55 per lb in the past month. New York's March arabica coffee contract lost 1.50 cents to finish at $2.354 a lb. EST. London's January robusta contract added $24 to end at $1,924 a tonne. The market was in a sideways trading pattern, said Nick Gentile, head of trading operations in commodity fund Atlantic Capital Advisors in New Jersey.
March cocoa on ICE lost $17 to end at $2,404 a tonne, with the session low at $2,398 barely above the Tuesday low of $2,395, which was the lowest for the second month since May 2009. London March cocoa futures rose 4 pounds to finish at 1,544 pounds a tonne. US cocoa futures dealt in an inside day, consolidating after tapping a 2-1/2-year low on Tuesday and then making a key reversal higher. The market felt pressure from the weak macro scene along with the lower commodity complex, dealers said.