Robusta coffee futures on ICE fell on Monday to their lowest level in almost 2-1/2 months, pressured by speculative selling, while white sugar recovered some ground after a sharp fall in the previous session. New York soft commodities markets were shut due to a US holiday and will reopen on Tuesday. November robusta coffee settled $32 lower at $2,021 a tonne, after hitting a session low of $2,017, the lowest level for the second position since June 23. Dealers pointed to persistent selling by funds after a negative close in the previous session reaffirmed the bearish momentum.
However, dealers noted the underlying fundamental picture remained constructive, with supplies expected to tighten. "The funds have decided to sell but we see the downside as limited," said one dealer. "Exports from Vietnam have now started to slow and it's going to be very tight up until the arrival of the next crop, which isn't really before December shipment." Participants were also closely monitoring the September expiry, with dealers noting the holders of the coffee seemed reluctant to deliver against the contract even though it is currently at a premium to the November position.
"There is still quite sizeable open interest with no (large-scale) deliverers," the dealer said. Coffee exports from Honduras rose nearly 94 percent in August compared with the same period last year, driven by a strong recovery in local output. October white sugar closed $1.7 higher at $374.10 a tonne. Prices tumbled 4 percent in the previous session, as technical weakness inspired a selling spree by funds. Dealers said the bearish momentum was over-done, although focus remains on a looming global surplus and an expected jump in EU output when the bloc scraps its quota regime at the end of this month.
"If you look at all the data that's coming out of France and Germany and the rest of Europe - we're seeing the production prospects edging ever higher," said one dealer. Speculators switched to a net long position of 1,288 lots in white sugar as of August 29, exchange data showed on Monday. December London cocoa settled 2 pounds higher at 1,519 pounds a tonne. Cocoa arrivals at ports in top grower Ivory Coast had reached around 1.966 million tonnes by September 3, a 35 percent increase on last season, exporters estimated on Monday.