Raw sugar and arabica coffee futures fell on Tuesday, under pressure from a weak Brazilian real and waning speculative buying, while a stronger pound pushed London cocoa to its lowest in nearly four weeks.
SUGAR
March raw sugar was down 0.18 cents, or 1.4 percent, at 12.76 cents per lb by 1424 GMT, after matching last week's four-week low of 12.65 cents. A further slide in the Brazilian currency weighed on prices. A weaker real boosts local returns on dollar-traded goods like sugar and coffee, encouraging producers to sell.
Dealers said technically-driven trading continued to dominate activity on Tuesday, as funds were testing support around the 40-day moving average. They noted speculative buying appetite was lacklustre and focus was shifting back to ample global supplies, despite a dent to production in the likes of the EU and Brazil.
"Now that funds and specs have liquidated short positions and are long, there is little aggressive buying for the producers to sell into," Nick Penney, senior trader at Sucden Financial, said in an update. December white sugar fell $1.60 or 0.5 percent, to $344.30 a tonne. France's farm ministry cut its estimate of the country's 2018 sugar beet crop on Tuesday to 39.2 million tonnes from 40.4 million last month as it lowered expected yields.
COFFEE
March arabica coffee was down 0.75 cents, or 0.7 percent, at $1.1325 per lb, after falling to $1.1285, its lowest in nearly six weeks. Prices tumbled more than 3 percent in the prior session, under pressure from a weak Brazilian real currency. Dealers noted the heavy speculative buying that has been supporting prices petered out, with bearish fundamentals now moving into focus.
"It seems like the supply and demand balance is finally weighing on prices," said one European dealer. "There's a lot of coffee coming." January robusta coffee fell $3, or 0.2 percent, to $1,651 a tonne, after also slipping to its lowest since early October.
COCOA
March London cocoa fell 18 pounds, or 1.1 percent, to 1,627 pounds a tonne, after dropping to 1,616 pounds, its weakest since Oct. 19. Prices were under pressure from the British pound, which rebounded after a UK minister said a Brexit deal is still possible this week. March New York cocoa was down $8, or 0.4 percent, at $2,240 a tonne. Focus was on ample supplies, as port arrivals in top grower Ivory Coast recently jumped compared to las.