Raw sugar at 6-1/2-year low, cocoa climbs

Raw sugar on ICE fell to a 6-1/2-year low on Monday, pressured by abundant supplies and fund selling, while cocoa bucked the commodity complex's weak trend and rallied to the highest in nearly nine months on crop concerns and technical buy signals. Arabica coffee fell more than 3 percent on fund selling. The 18-market Thomson Reuters CoreCommodity Index fell for the third straight day as oil, copper and wheat prices dropped.
Raw sugar prices extended last week's losses on heavy stocks, favourable cane harvest weather in top grower Brazil and higher-than-expected output in India and Thailand. "Stocks are high and there is more than enough sugar being produced in the world," said Sergey Gudoshnikov, a senior economist with the International Sugar Organisation.
July raw sugar on ICE settled down 0.26 cent, or 2.2 percent, at 11.46 cents a lb, near the session low at 11.44 cents, the lowest level since January 2009. "Center-south Brazil harvest results to date are relatively strong, although ethanol is sucking cane juice more strongly than sugar," analyst Green Pool said in its latest weekly report, referring to the allocation of Brazilian cane to sugar and ethanol biofuel.
August white sugar closed down $2.20, or 0.6 percent, at $345 a tonne. Its premium over the raws jumped as high as $92.41 per tonne, rising for the fourth straight session to the highest since May 6. Traders said cocoa futures garnered support from crop concerns in West Africa, where roughly 70 percent of the world's beans are produced. Intense downpours flooded plantations, damaged roads and spawned fears of disease in top grower Ivory Coast, while dry weather in Nigeria's biggest cocoa region caused trees to produce shrivelled mid-crop pods.
July London cocoa settled up 35 pounds, or 1.7 percent, at 2,137 pounds a tonne, the highest since late-September. Technical buying came into the market after the contract reversed higher on Friday while the weak sterling also supported the market, traders said.
New York September cocoa closed up $53, or 1.7 percent, at $3,198 a tonne after touching $3,203, the highest level since Oct. 1. Technical buying came in after Friday's outside reversal up, when the contract opened below the prior session's low and closed above the previous high, traders said. Arabica coffee futures fell, with September settling down 4.1 cents, or 3.1 percent, at $1.303 per lb. September robusta coffee inched up $1, or 0.06 percent, at $1,734 a tonne.