Raw sugar futures on ICE fell to a four-month low Friday, extending this week's steep losses on chart-based sell signals while demand from China lifted the white premium to contract highs. New York cocoa fell on pressure from the weak British pound, hovering just above the prior session's 10-month low, and posted its biggest monthly loss in more than four years after speculators raced out of the market. Coffee prices also fell.
March raw sugar settled down 0.11 cent, or 0.8 percent, at 13.14 cents per lb, after dipping to a low of 13.07 cents, the spot contract's weakest level since October 1. The contract closed the week down 8.9 percent, its deepest drop since September 2011, after strong technical sell signals spurred heavy speculative liquidation. For the month it closed down 13.8 percent, a drop not seen since March 2015.
The move lower also appeared to have attracted new shorts to the market, with exchange data showing total open interest surged by more than 11,000 lots to 895,437 lots, the highest since mid-June, as prices tumbled Wednesday and Thursday. An improving crop outlook in top grower Brazil has also contributed to the decline in prices.
"Physical demand is apparently also subdued at present, whereas the production outlook in Brazil is brightening," Commerzbank said in a market note on Friday. The spot raw spread recovered to a slight premium after sinking to a 0.04-cent discount on Thursday, pressured by weak cash prices. March white sugar futures settled down 20 cents, or 0.05 percent, at $407 per tonne. The March/May spread surged to $14.20 while the spot whites-over-raws premium rose to $117 per tonne, both contract highs.
March New York cocoa settled down $30, or 1.1 percent, at $2,761 per tonne, closing the month down 14 percent, its weakest since November 2011, after Thursday's drop to a 10-month low at $2,731. "People are taking a breath, hoping for some sideways movement to take stock of the situation," one London cocoa dealer said. London cocoa posted more significant gains with March ending down 3 pounds, or 0.2 percent, at 2,009 pounds per tonne, finishing January down 11 percent, also its biggest monthly tumble since November 2011. Robusta coffee futures were slightly lower with March settled down $20, or 1.43 percent, at $1,382 per tonne. March arabica coffee futures settled down 2.8 cents, or 2.4 percent, at $1.1635 per lb.