Raw sugar futures fell with the Brazilian currency on Tuesday after rising to the previous session's seven-week peak, while the discount of the October whites contract deepened against December ahead of the spot contract's expiry on Friday. October raw sugar settled down 0.02 cent, or 0.2 percent, at 11.18 cents per lb, after matching Monday's seven-week high of 11.27 cents.
Total open interest has fallen daily as prices rebound above last month's 10-year low, falling 126,586 contracts over the past 12 sessions to 935,290 contracts on Monday, ICE data show. The market's improved performance could encourage speculators to scale back a record net short position, which would give the rally added momentum, dealers said.
Support earlier in the session came from the prospect of a drop in production in the European Union, with heat waves and drought in France this summer expected to lead to a sharp drop in sugar beet production, the farm ministry said. Prices turned lower after facing resistance at Monday's seven-week high while the weak Brazilian real against the US dollar provided pressure, dealers said.
The market appeared to be taking a breather after rallying 13 percent above the 10-year low of 9.91 cents reached on Aug. 22, they said. December white sugar settled up $3.30, or 1 percent, at $337.50 per tonne. The October discount to December extended to as much as $9.90, from a 30-cent premium three sessions prior, ahead of the spot contract's expiry on Friday. Thus suggested a lack of appetite to take delivery, dealers said.
"The lack of enthusiasm for the (October) seems to be in stark contrast to the short-term mood of the market which continues its modest rise and upside retracement," said Thomas Kujawa, co-head of the softs department at Sucden Financial. December New York cocoa settled down $16, or 0.7 percent, at $2,284 per tonne, in choppy dealings that lacked a clear trend.
The outlook for 2018/19 main crops in West Africa remained generally favorable, though there were some concerns about disease after recent rains, dealers said. December London cocoa settled down 7 pounds, or 0.4 percent, at 1,644 pounds per tonne. December arabica coffee settled down 0.8 cent, or 0.8 percent, at $1.0045 per lb. Pressure came from the weak currency in top grower Brazil and ample supplies expected to be exported from there, traders said. November robusta coffee settled up $1, or 0.1 percent, at $1,478 per tonne.