LONDON: Raw sugar futures on ICE slumped to their lowest in more than 15 months on Wednesday as weak technicals reinforced the downward momentum and spurred a fresh bout of short-selling by speculators, traders said.
SUGAR
July raw sugar was down 0.28 cents, or 2.03 percent, at 13.51 cents per lb by 1403 GMT after falling to a session low of 13.45, its weakest since February 2016.
Prices suffered heavy losses in the previous session after stronger than expected sugar production in top grower Brazil fuelled worries about ample global supplies and a looming surplus.
Dealers said this had weakened the technical picture and laid the groundwork for follow-through selling on Wednesday.
"The breach of recent lows has brought on fresh short-selling," said one dealer. "And there's been a recent swell in the open interest. So the assumption here is these guys are in the short pack and they're getting shorter."
Traders said the market was also weighed down by improving weather in Brazil, where heavy rains last month spurred worries about short-term disruptions to production.
August white sugar also fell in tandem, easing $6.50, or 1.60 percent, to $399.40 a tonne after slipping to $399, its weakest since February 2016.
The sugar market is heading for a surplus of 3.5 million tonnes in 2017/18, Sucden said in a quarterly report on Wednesday, pointing to a reduced risk of El Nino and higher output in the European Union, India and Thailand as some of the drivers.
COFFEE
July arabica coffee rose 0.55 cents, or 0.44 percent, to $1.2695 per lb as technicals improved and buying interest re-emerged.
Prices fell on Tuesday after weak chart-based signals and easing worries about cold weather in Brazil renewed speculative selling, pushing prices below recent support levels.
"Futures are testing the bottom end of the recent range and support around $1.27 has been robust," said Geordie Wilkes, analyst at Sucden Financial.
July robusta also rose $14, or 0.69 percent, to $2,036 a tonne.
COCOA
A firmer British pound pressured London cocoa, with September easing 2 pounds, or 0.12 percent, to 1,627 pounds a tonne.
September New York cocoa rose $2, or 0.10 percent, to $2,058 a tonne.
Speculators continued to roll forward out of the July New York contract and into the September contract, ahead of a first notice day.
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