Raw sugar on ICE fell on Thursday for the first time in six sessions, after a short-covering rally petered out, while arabica coffee also dropped as the currency of top grower Brazil held near a three-year low against the US dollar. October raw sugar settled down 0.09 cent, or 0.8 percent, at 10.8 cents per lb, hovering just below the previous session's four-week high of 10.97 cents.
The drop followed a rise of 5.6 percent over the past five sessions, which resulted largely from technically driven short-covering. Momentum indicators have now switched to neutral from bearish, dealers said. Total open interest fell on Wednesday for a ninth straight session to 994,026 lots, down nearly 68,000 lots over that period, ICE data shows.
Though the Brazilian real rose slightly earlier in the session, it remained near last week's three-year low against the dollar. That has attracted speculative selling of sugar as the weak currency has helped to boost prices in Brazil. Rising production in India was expected to help to keep a lid on prices, dealers said.
India will surpass Brazil as the world's top sugar producer next year, with the South American country losing its lead for the first time since the 1990s as its mills allocate increasingly more cane for ethanol production and as low investments dent cane yields. December white sugar settled down $4.70, or 1.4 percent, at $329.50 per tonne.
December arabica coffee settled down 1.6 cent, or 1.5 percent, at $1.022 per lb. The second month had slumped to a 12-year low of 98.65 cents on Tuesday. The market was back on the defensive after Wednesday's 2.3 percent rally, with a record crop in top producer Brazil ensuring the market was well supplied, dealers said.
November robusta coffee settled down $9, or 0.6 percent, at $1,492 per tonne. The second month had slumped to a 2-1/2 year low of $1,465 on Tuesday. Coffee prices in Vietnam hit their lowest in nearly 2-1/2 years, following global cues, while trading in Indonesia was thin at the end of its main harvest season, traders said. December New York cocoa settled down $30, or 1.3 percent, at $2,281 per tonne. December London cocoa settled down 20 pounds, or 1.2 percent, at 1,652 pounds per tonne.