Raw sugar futures on ICE fell for the sixth straight session, hitting an eight-week low on Tuesday after Brazil's latest harvest update showed that the top grower was on track to reap a record cane crop. Cocoa futures on both ICE Futures US and Liffe corrected down from last week's two-year high, while arabica and robusta coffee markets were firm in rangebound dealings on light support from the weak US dollar.
Raw sugar futures eased amid continued investor long liquidation on abundant global supplies in thin dealings ahead of the US Thanksgiving Day holiday on Thursday, when ICE agricultural markets will shut, though losses were limited due to scale-down buying, dealers said. ICE March raw sugar futures closed down 0.02 cent, or 0.1 percent, at 17.30 cents per lb, just above their eight-week low of 17.26 cents a lb, hit earlier in the session.
"We feel there is still more liquidation to come given the absence of physical offtake and ample nearby supply of both raws and whites," said Sucden Financial Senior Trader Nick Penney in a morning report. Sugar output in Brazil's center-south fell 20 percent to 1.96 million tonnes in the first half of November from the previous fortnight after rains picked up at the end of the crushing season, local industry association Unica said early in the session. Speculators have sharply reduced their net long position in recent weeks and dealers said the market should stabilise just below current levels as selling abates and prices attract physical buying. The market was not yet considered undervalued and there was potential for further losses, analysts said.
"Because we're not cheap yet there is also less of a case for upside," said Tobias Merath, analyst at Credit Suisse. March white sugar on Liffe ended down $1.10, or 0.2 percent, at $461.50 per tonne. In cocoa, ICE March futures ended down $34, or 1.2 percent, at $2,769 a tonne, sliding from last week's more than two-year high of $2,820.
Cocoa dealers eyed the historically large combined net long position on the Liffe and ICE markets, reflecting speculators' bullish bets on prices, noting that chocolate makers have allowed their forward purchases to fall. March cocoa on Liffe closed down 23 pounds, or 1.3 percent, at 1,751 pounds per tonne. March arabica futures settled up 0.20 cent, or 0.2 percent, at $1.0875 per lb. On Liffe, January robusta coffee finished up $37, or 2.4 percent, at $1,603 a tonne.