ICE raw sugar futures eased on Tuesday as the small delivery against the July contract expiry signalled weak near-term demand for the sweetener, while cocoa fell from the prior session's near-three-year high. Arabica coffee on ICE Futures US edged lower with dealers still uncertain over the extent of crop damage in top grower Brazil from a recent drought.
Raw sugar futures fell, extending losses after closing below the 100-day moving average on Monday and as dealers viewed the small delivery as bearish. CSC Sugar LLC and a Louis Dreyfus Commodities unit have bought the smallest ICE July raw sugar delivery in 15 years. A CSC Sugar trader said this was the company's first exchange purchase in about seven years. All the sugar came from Central America. "There was no willing receiver of a large tonnage. It was a sign that there is a lack of demand," a senior London-based trade source said.
ICE October raw sugar fell 0.21 cent, or 1.2 percent, to settle at 17.80 cents a lb. Liffe August white sugar eased $6.10, or 1.3 percent, at $466.10 a tonne. ICE September cocoa settled down $8, or 0.3 percent, at $3,119 in thin dealings, below a near three-year peak of $3,142 hit on Monday.
"A reversal on the downside in breach of the 10-day moving average currently at $3,096 could see declines extend towards the 40-day moving average at $3,024 while any extended losses could target levels below $3,000," said Kash Kamal, research analyst at Sucden Financial. Liffe September cocoa ended down 13 pounds, or 0.7 percent, at 1,935 pounds a tonne.
The benchmark ICE September arabica contract fell 4.15 cents, or 2.4 percent, to close at $1.7095 per lb. "Arabica coffee prices are expected to trade sideways over the next month, consolidating as Brazil's 2014/15 production outlook remains uncertain," Rabobank said in its latest Agri Commodities Monthly report. This comes after global coffee exports dropped to 9.62 million 60-kg bags in May, down 5.6 percent in June 2013, the International Coffee Organization said. The September Liffe robusta coffee contract finished flat at $2,016 per tonne, finding strong resistance at the 100-day moving average at $2,032.