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Cocoa extends tumble to multiweek lows, sugar also drops

Cocoa extends tumble to multiweek lows, sugar also dropsNEW YORK/LONDON: Cocoa futures fell for the third straight session on Wednesday, reaching multiweek lows as crop weather in West Africa improves and chart signals become increasingly bearish, while sugar and coffee futures also fell.

These markets bucked the trend in larger commodities, with the 19-commodity Thomson Reuters CoreCommodity Index rebounding above a five-month low.

COCOA

September New York cocoa settled down $58, or 2.4 percent, at $2,337 per tonne, after falling to $2,321, the lowest since June 8.

“There’s been good weather in Africa, and there’s a big crop coming, so the market is just pricing in that idea,” said Shawn Hackett, president of Hackett Financial Advisors in Boca Raton, Florida.

Charts were increasingly bearish after falling nearly 8 percent this week so far, though the double bottom of $2,320 reached in June provided technical support.

Dealers eyed upcoming second-quarter grind data for the market’s next move. North American grindings are expected to range between 1 percent lower to 1 percent higher on Thursday. Asian data, expected Friday, is forecast 6 to 10 percent higher.

September London cocoa settled down 34 pounds, or 2 percent, at 1,709 pounds per tonne, the lowest level since June 14.

SUGAR

October raw sugar settled down 0.05 cent, or 0.5 percent, at 11.08 cents per lb.

Renewed weakness in Brazil’s real currency against the US dollar, which attracts selling by Brazilian producers, pressured prices along with a supply glut in India, dealers said.

Sugar 2018/19 output in top grower Brazil’s main growing region is projected to fall to 28 million tonnes, down by 3 million since the previous estimate, consultancy Safras & Mercado said.

“India will be able to make up the difference from what we lose in Brazil,” the US trader said, adding that this limited the bullish impact of the news from Brazil.

India’s approval of an increased sugarcane price for the next season raised expectations for plentiful exports from the world’s second biggest producer, traders said.

In a note, Commerzbank said single-digit raw sugar prices, not seen in a decade, could be possible this autumn.

The October whites premium over October raws weakened slightly to around $78, after peaking three sessions prior from around $85.

October white sugar settled down $4.20, or 1.3 percent, at $322.10 per tonne.

COFFEE

September arabica coffee settled down 1.1 cents, or 1 percent, at $1.0815 per lb.

September robusta coffee settled down $3, or 0.2 percent, at $1,651 per tonne.

Copyright Reuters, 2018
 

Source: Brecorder

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