Tuesday, 10 November 2015 01:49
LONDON: Raw sugar futures on ICE extended losses on Monday after a large increase in the net long position held by speculators, while robusta coffee rose on concerns over the potential impact of dry weather on production.
Cocoa was little changed.
Raw sugar futures eased after a selloff on Friday driven by a surging dollar on stronger-than-expected U.S. jobs figures.
A large increase in the net long position held by speculators added to sentiment that the market needed a breather after soaring to a nine-month peak last week.
“We have seen a reversal off the nine-month highs, more really led by the stronger dollar, and perhaps the confirmation of a very strong net long position,” said Tracey Allen, commodity analyst with Rabobank.
Speculators boosted their net long positions in raw sugar on ICE Futures U.S. to a two-year high in the week ended Nov. 3, and raised bearish bets in arabica coffee contracts, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday.
ICE benchmark raw sugar was down 0.32 cents, or 2.2 percent, at 14.14 cents per lb at 1458 GMT, well below Tuesday’s nine-month peak of 15.53 cents.
March white sugar was down $ 5.5, or 1.4 percent, at $ 380.30 per tonne.
Sudan is a likely prime destination for sugar to be delivered against Friday’s ICE December futures expiry and could become an arbitrage opportunity for EU sugar imports, trade sources said.
Robusta coffee futures firmed, supported by concerns over the impact of the El Nino weather pattern on production, pulling arabicas higher.
“Robustas are up on the back of dry weather in coffee areas. Arabicas are following robusta futures prices, which is unusual, as typically robustas would follow arabicas,” said Carlos Mera, commodity analyst with Rabobank.
Coffee futures were also supported by the softer dollar which makes dollar-based commodities cheaper in other currencies, and dry weather forecast for this week in Brazilian coffee areas.
January robusta was up $ 29, or 1.8 percent, at $ 1,633 per tonne.
“A resumption of gains could target $ 1,650, while resistance holds near the recent high at $ 1,684,” said Myrto Sokou, a senior research analyst with Sucden Financial.
December arabica traded up 1.15 cents, or 1 percent, at $ 1.1890 per lb.
New York March cocoa was down $ 16, or 0.5 percent, at $ 3,230 per tonne, with volume buoyed by December/March spreading.
London March was down 16 pounds, or 0.7 percent, at 2,205 pounds per tonne.
