Sugar and arabica coffee at multimonth lows on fund selling

Raw sugar futures on ICE fell to a four-month low and arabica coffee to a three-month trough on Thursday on fund selling fueled by breaches of technical support levels, the tumbling Brazilian currency and abundant global supplies. London cocoa futures also fell, while the New York market was supported by the firm British pound.
March raw sugar settled down 0.45 cent, or 2.3 percent, at 19.36 cents per lb after slipping to 19.33 cents, its weakest since August 4. "The funds have been getting out (of long positions), and there is a growing view that come next year we are going back into surplus," one London dealer said.
Sugar's two-year global supply shortfall is expected to end in 2017-18, with rain returning to major Asian producers while European Union reforms will boost production in the trading bloc. Dealers said the market had finally broken through solid support around 19.50 cents on the March contract. March white sugar settled down $11.10, or 2.1 percent, at $515.30 per tonne after dropping to $515, the lowest since early June.
Dealers noted currency weakness in Brazil, the top grower of both sugar and coffee, as a likely factor in the commodities' decline as this makes prices more attractive in local currency terms. March arabica coffee futures settled down 5.7 cents, or 3.8 percent, at $1.449 per lb, their lowest since late August. The contract sharply extended losses after falling below the 50 percent retracement level from the November 7 high to the March low but stopped dropping just above the 200-day moving average.
"Today's break below October 7's 148.60 (cents) larger-degree corrective low and key risk parameter confirms the major peak/reversal count ... and exposes a correction or reversal lower that may be major in scope," said Dave Toth, market insights senior analyst for RJO'Brien in Chicago, in a report that Reuters saw. January robusta coffee settled down $36, or 1.78 percent, at $1,990 per tonne, after falling to $1,984, the lowest since October 7. Cocoa futures were mixed, with a rise in the value of sterling weighing on London prices. March London cocoa settled down 3 pounds, or 0.15 percent, at 1,953 pounds per tonne. It held just above Wednesday's 1-1/2-year low after closing November down 11 percent. March New York cocoa settled up $17, or 0.7 percent, at $2,406 per tonne.