Raw sugar futures on ICE fell for the sixth straight session on Tuesday, tapping a six-week low and pushing nearby premiums lower on fund liquidation amid technical sell signals and diminished concern about short-term supply tightness. March raw sugar settled down 0.38 cent, or 1.8 percent, at 21.19 cents per lb, after dipping to 21.11 cents, the contract's weakest level since September 15.
The move took the front month's premium to a five-month low at 0.38 cent. "The prompt market is clearly crumbling. Analysts' numbers suggest that high prices have gone a long way to resolving the prospective supply tension in the first quarter of 2017," Commonwealth Bank of Australia analyst Tobin Gorey said. Dealers said the market's recent slide from the 2012 high of 23.90 cents touched October 6 had also triggered a bearish technical outlook. December white sugar settled down $12.20, or 2.1 percent, at $567.20 per tonne, with the contract's premium over March falling as low as $5.90 after rising to a contract high at $9.30.
Cocoa futures fell along with larger markets, with the 19-commodity Thomson Reuters CoreCommodity Index dropping to a four-week low. Cocoa prices were also weighed by an improving crop outlook in top grower Ivory Coast and speculative selling, traders said. March New York cocoa settled down $16, or 0.6 percent, at $2,627 per tonne, while March London cocoa settled down 26 pounds, or 1.2 percent, at 2,172 pounds per tonne. Arabica coffee futures fell for the second straight day, dropping further from Friday's highest level in more than 1-1/2 years.
December arabica coffee settled down 2.7 cent, or 1.64 percent, at $1.6145 per lb. Total open interest rose for the 17th straight session on Monday to a record 214,133 contracts, ICE data showed. Commerzbank, in a market update, said coffee stocks looked set to decline further in the 2016/17 season with a second successive global supply deficit. "The robusta crop in particular is looking weak in key growing countries such as Brazil, Vietnam and Indonesia. The tightening supply on the coffee market is driving up prices," Commerzbank said.
January robusta coffee settled down $26, or 1.2 percent, at $2,158 per tonne. Vietnam, the world's top robusta producer, is forecast to export between 100,000 tonnes and 110,000 tonnes (1.67 million to 1.83 million 60-kg bags) of coffee this month, down from the 130,000 tonnes estimated for October export, traders said on Tuesday.