Raw sugar futures fell on Thursday as speculative selling emerged against a backdrop of a weaker Brazilian currency, while a weaker British pound boosted London cocoa prices. March raw sugar settled down 0.07 cent, or 0.5 percent, at 14.11 cents per lb, remaining well within the past month's trading range.
Dealers noted speculators sold in light volume as prices came under pressure again from a weaker Brazilian real. "The rally didn't hold and I think some producers took advantage of it," one dealer said, referring to Tuesday's rise of 2.9 percent. "And since then it's been undone by the currency weakness."
A weaker Brazilian currency can encourage producer selling since it boosts returns in the local currency. Dealers also noted the market was technically vulnerable, after the March contract repeatedly failed to breach the 50-day moving average.
December white sugar settled down 70 cents, or 0.2 percent, at $373.40 per tonne, with dealers noting the recent climb in prices had also spurred hedging by EU producers. December arabica coffee settled up 0.45 cent, or 0.4 percent, at $1.2455 per lb.
Total open interest rose for the 13th straight session on Wednesday to a record 239,024 contracts, ICE data showed, as the benchmark contract hovered just above a four-month low. Traders said they were waiting to see if the much-needed rain in top grower Brazil would be enough to ensure crop flowers are pollinated.
Supplies of prompt Brazilian coffee have tightened in the United States and Europe as importers say some shipping companies are cutting container availability from the world's biggest grower. January robusta coffee settled down $12, or 0.6 percent, at $1,949 per tonne.
Prices have been pressured by waning worries that wet weather in top grower Vietnam could delay the harvest. December London cocoa settled up 28 pounds, or 1.8 percent, at 1,576 pounds per tonne, reversing the previous day's losses as the British pound slumped and provided support.
March New York cocoa settled up $34, or 1.6 percent, at $2,119 per tonne. US prices rose in sympathy with the London market but also received support from the rallying spot spread, traders said, with the December premium over March surging to an $11 premium from Wednesday's $6 discount. Additional support came from Hershey Co's third-quarter earnings that topped analysts' estimates due to a rise in some chocolate sales amid lower cocoa prices.