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Wednesday, 05 August 2015 19:15
LONDON: Raw sugar futures on ICE dipped on Wednesday, hovering above the previous session’s 6-1/2-year low, pressured by a weak Brazilian currency and over-supply, while arabica coffee eased, weighed by a stronger dollar.
Cocoa was little changed, with dealers tracking the possible impact on production from the El Nino weather pattern.
October raw sugar futures on ICE were down 0.03 cent, or 0.3 percent, at 10.98 cents a lb at 1047 GMT.
They fell to 10.79 cents, the lowest since December 2008, on Tuesday, on pressure from the weak Brazilian real, which extended losses deeper into a 12-year low.
“The real definitely has been a short-term driver but the fundamentals are what they are in the sense that Brazil is still harvesting sugar and coffee and the weather is favourable for both, which doesn’t provide much support for prices,” said Kona Haque, head of research at commodities house ED&F Man.
A huge overhang of stocks in India and Thailand weighed on the sugar market.
October white sugar was up $ 1.70, or 0.5 percent, at $ 349.40 per tonne.
September arabica futures were down 0.4 cent, or 0.3 percent, at $ 1.245 per lb, well above last month’s 1-1/2-year low of $ 1.1985 per lb, and were weighed by the firmer dollar.
September robusta futures were up $ 9, or 0.6 percent, at $ 1,648 a tonne, trading above Monday’s two-month low at $ 1,621.
“On the downside, any breach of support now at $ 1,645 could then target $ 1,630 after which protracted losses could target $ 1,600 and the recent lows towards $ 1,575,” said Kash Kamal, senior research analyst with Sucden Financial.
Cocoa futures held steady with dealers focused on the potential impact of the El Nino weather pattern on crops in key origins in West Africa and Asia.
“There’s no strong evidence of El Nino being detrimental at this stage. It may come in the future,” said Eric Sivry, head of agri-options brokerage at Marex Spectron.
“There are potential bullish factors, which are Ghana having oversold last year 200,000 metric tonnes of cocoa and El Nino potentially having a detrimental impact on crops. But Ghana is priced in at this stage and El Nino isn’t showing up yet.”
New York September cocoa was up $ 3, or 0.1 percent, at $ 3,168 a tonne. London September cocoa firmed 3 pounds, or 0.1 percent, at 2,105 pounds a tonne.
