Arabica coffee futures on ICE fell to a 1-1/2-year low on Monday on chart-based selling and as new sellers entered the market, while raw sugar moved in the opposite direction on short-covering. Cocoa markets eased. US markets were closed on Friday for the long Independence Day weekend.
Arabica coffee futures fell in moderate volume, extending losses after falling below the prior session's low and as new short positions were placed, traders said. This selling was met by roaster buying, they added. September arabica settled down 2.25 cents, or 1.8 percent, at $1.2515 per lb, just above the session low at $1.2505, the lowest since January 2014.
Robusta coffee futures also fell. Though volume was thin after July's first notice day last week, traders focused on a high July/September premium at $133 per tonne, just shy of last week's peak at $134, the highest since 2012. September robusta closed down $37, or 2.1 percent, at $1,711 a tonne. October raw sugar futures clawed back from early losses and finished up 0.18 cent, or 1.5 percent, at 12.48 cents a lb. The rally came after total open interest fell for the ninth straight session on July 2 to 799,852 lots, down 10 percent from two weeks prior, exchange data showed.
While the rally surprised some traders, given the abundant sugar supplies, some pointed to rising demand for ethanol, which is made from sugar in Brazil. Traders turned their attention to Brazilian cane industry data expected on Tuesday. "The (Unica) report covering June 16-30 should show a much better cane crush number than the first half of June at consensus figures of 43.5 million tonnes of cane crushed," said Nick Penney, a senior trader with Sucden Financial Sugar.
Analysts noted a high whites-over-raws premium. "It would appear there is likely to be a shortage of deliverable material versus the August whites expiry," said Tom McNeill, director of analyst Green Pool. The August white sugar contract expires on July 16. August white sugar futures closed up $4.80, or 1.3 percent, at $375.90 a tonne. Cocoa futures eased slightly ahead of quarterly cocoa grind data, a measure of demand, due to be released next week. So far, weak demand has dealers expecting lower grind data. September London cocoa closed down 10 pounds, or 0.5 percent, at 2,171 pounds a tonne and September New York cocoa ended down $10, or 0.3 percent, at $3,278 a tonne.