Raw sugar extends losses, cocoa rebounds

09 Dec, 2017

Raw sugar futures on ICE slumped to a six-week low on Friday, falling for the fourth straight session as traders focused on abundant global supplies and weakening chart signals, while cocoa prices rebounded above multi-month lows. March raw sugar settled down 0.26 cent, or 1.8 percent, at 14.05 cents per lb, after falling to the weakest since Oct. 24 at 13.97 cents.
It closed the week down 6.2 percent, its biggest drop in four months. Dealers pointed to expectations for a large global surplus and chart-based sell signals, after prices fell below the 50-day moving average and moved near technically oversold levels on the 14-day relative strength index.
The weaker Brazilian currency against the US dollar also added pressure, as this encourages producer selling by improving returns in local currency terms, traders said. "Chatting around the market it seems there is scant concern for supply (although the March/May is seemingly being 'played' from the long by the trade as ethanol priorities have usurped previous forecasts of cane mix)," said Nick Penney, senior trader at Sucden Financial, in a note.
The March premium over May closed at 0.08 cent, up from 0.04 cent last week. March white sugar settled down $4.40, or 1.2 percent, at $366.80 per tonne.
March London cocoa settled up 18 pounds, or 1.3 percent, at 1,409 pounds per tonne, after tapping 1,377 pounds, the weakest for the second position since April 20. Dealers said the market was underpinned by rising demand and expectations for a smaller global surplus.
March New York cocoa settled up $7, or 0.4 percent, at $1,887 per tonne, after falling to the lowest since Aug. 24 at $1,860. It closed the week down for the fourth straight week. March arabica coffee settled down 0.3 cent, or 0.2 percent, at $1.226 per lb, after falling to a 5-1/2-month low of $1.219. It closed the week down 5.4 percent, its sharpest fall since August. January robusta coffee settled up $20, or 1.2 percent, at $1,750 per tonne.

Read Comments