Coffee and sugar futures reversed to close lower on Monday after Standard & Poor's revised its ratings outlook on the United States to negative from stable, hitting investor confidence. Cocoa prices also finished lower in thin volume on pressure from the weak macroeconomic scene and expectations that exports from top grower Ivory Coast will resume in the near future after a ban of nearly three months from a bitter power struggle there was recently lifted.
ICE July arabica coffee reversed earlier gains to fall 3.70 cents or 1.3 percent to close at $2.8740 per lb. "All risky assets would drive away a little bit of interest," said Rodrigo Costa, vice-president of Institutional Sales for Newedge USA. "That would be the reason to see coffee down, and sugar too."
In sugar, dealers saw additional downside price risk due to expectations of ample global supplies and saw key support in ICE July raw sugar futures at 21 cents a lb. ICE May raw sugar futures fell 0.19 cent to close at 24.40 cents per lb, while benchmark July finished down 0.18 cent at 24.79 cents. ICE July cocoa futures tumbled $100, or 3.2 percent, to settle at $3,057 a tonne.
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