LONDON: White sugar futures fell on Tuesday, pressured by a stronger dollar and a looming global supply glut, while arabica coffee slipped to its lowest in more than two months.
SUGAR
May white sugar was down $4 or 1.1 percent, at $357.50 a tonne by 1450 GMT, giving up gains made in the prior session.
The market was under pressure from a stronger US dollar and ample supplies due to strong production in India, Thailand and the European Union this season.
However, participants were closely monitoring weather in the EU amid signs of an approaching cold snap which could hurt crops.
“Notably, an increased number of frost days are expected over the European continent as temperatures are forecast to plummet,” Marex Spectron said in a note.
Ukraine produced 2.14 million tonnes of white sugar in the 2017/18 season, up 6.5 percent from the prior season, sugar producers’ union Ukrtsukor said on Tuesday.
March raw sugar rose 0.03 cent, or 0.2 percent, to 13.41 cents per lb.
The spot contract has been supported recently by the possibility of fewer available supplies for delivery as it inches closer to expiry at the end of the month.
COFFEE
March arabica coffee was down 0.20 cent, or 0.2 percent, at $1.1775 per lb, after falling to $1.1695, its weakest since Dec. 15.
Prices tumbled on Friday – the last trading session before a US holiday – on a wave of fund selling ahead of the spot contract’s first notice day on Tuesday.
Dealers said this weakened the technical picture and encouraged fresh short-selling.
“The chart looks pretty ugly and the speculators covered a fair bit more than the market had thought,” one dealer said. “So they have scope to sell.”
Exchange figures on Friday showed speculators cut their net short position in arabica coffee by 8,864 lots to 47,736 lots, a five-week low.
However, dealers said the March/May spread had recovered somewhat, signalling selling pressure may be easing.
May robusta coffee fell $3, or 0.2 percent, to $1,738 a tonne, after touching $1,733, its lowest since Jan. 31.
COCOA
May New York cocoa rose $7, or 0.3 percent, to $2,141 a tonne.
May London cocoa climbed 6 pounds, or 0.4 percent, to 1,510 pounds a tonne.
About 27,000 tonnes of cocoa were delivered at ports in Ivory Coast between Feb. 12 and Feb. 18, down from 40,000 tonnes during the same period last season.
Source: Brecorder.com
