Raw sugar futures on ICE sank more than 4 percent in heavy volume on Wednesday, breaking a six-day streak higher on chart-based selling and pressure from larger Brazilian crop forecasts as the industry gathered in New York. New York cocoa rose for the fifth straight day, reaching the highest in nearly seven months, with support coming from chart-based buying and the firm sterling against the US dollar.
Arabica coffee inched lower in quiet dealings pressured by a large crop estimate for 2015/16 in Brazil, the world's top grower of both sugar and coffee, by a US attache. In sugar, consultancy Datagro told the industry, which gathered for Sugar Week, that Brazil's main center-south region will see higher year-over-year sugar production in 2015/16 (April-March).
This followed other estimates for increases there as well as lowered world sugar supply deficit forecasts. "There's just too much sugar all over the place. The market is just over burdened with supply," said one US trader. Raw sugar futures turned sharply lower after tapping a 10-week high, attracting technical selling.
July raw sugar settled down 0.62 cent, or 4.6 percent, at 12.96 cents a lb, the spot contract's biggest tumble since January 23. This slump came after the market initially nudged up to a session high at 13.60 cents, the highest since March 6. "The medium-term perspective still seems to favour the sugar bears at present with 'plenty of sugar' the consensus," said Thomas Kujara, co-head of the softs desk at Sucden Financial Sugar. August white sugar on ICE closed down $13.20, or 3.4 percent, at $370.10 per tonne, also the biggest slump for the spot contract since January 23.
New York cocoa continued its trek higher despite the financial ministry of Ivory Coast's increased crop estimate for the world's biggest grower, as the rallying British pound attracted buying of the dollar-traded market. New York July cocoa finished up $19, or 0.6 percent, at $3,056 a tonne, after reaching the highest since October 24 at $3,070 a tonne. London July cocoa rose 5 pounds, or 0.2 percent, to end at 2,035 pounds a tonne.
Arabica futures eased, with traders citing pressure from the largest 2015/16 Brazilian coffee crop estimate so far, by a US attache. Arabica coffee futures nudged lower, with July closing down just 0.1 cent, or 0.1 percent, at $1.354 per lb. July robusta coffee ended down $7, or 0.4 percent, at $1,724 a tonne.