Raw sugar and arabica coffee futures on ICE slid on Thursday, hitting their lowest levels in more than two years on concern about surplus supplies. Cocoa futures on both Liffe and ICE Futures US were also lower, giving up most of the prior session's technically driven gains, as traders said top producer Ivory Coast had begun sales for the 2013/14 season.
March raw sugar futures on ICE settled flat at 18.54 cents per lb, paring losses after dipping to 18.31 cents, the lowest level for the benchmark front month since August 2010. Profit-taking was seen lifting the contract off its session low.
"We're still looking at a lot of options around that 18 cent level," said Michael McDougall, a vice president for Newedge USA in New York. Open interest is heavy at 18 cents in both the January options, which will expire on December 17, and March options, dealers said, noting this pressured the futures market.
Prices have almost halved from a peak of 36.08 cents in February 2011, with successive substantial global surpluses in the 2011/12 and 2012/13 seasons leading to a build-up in stocks and sparking a sustained bear market. Romain Lathiere, head of dealing at Diapason Commodities Management, said the scope for further losses appeared limited, adding that the market may consolidate before rebounding.
Total open interest tumbled by more than 7,000 lots on December 12 to 757,167 lots, ICE data showed, indicating liquidation took place then, dealers said. March white sugar on Liffe inched down 40 cents to close at $499.80 a tonne after touching $495.00, the lowest level for the front month since June 2010.
March arabica coffee futures dropped 2.90 cents, or 2 percent, to close at $1.4360 per lb after dipping to $1.4325, the lowest level for the second month since June 2010. March robusta coffee futures closed up $2 at $1,892 a tonne, while the nearby premium soared to around $36, from $7 the previous session, supported by the current low level of certified stocks.
Liffe certified coffee stocks stood at 108,490 tonnes in late November, compared with almost 300,000 tonnes a year earlier. March cocoa on Liffe fell 17 pounds, or 1 percent, to close at 1,530 pounds a tonne, almost completely erasing the prior session's gains. March cocoa futures on ICE closed down $19, or 0.8 percent, at $2,422 a tonne.