Raw sugar drops to 2-1/2-year low

Raw sugar futures on ICE fell to a 2-1/2-year low on Wednesday as broader economic concerns and the weakness of top producer Brazil's currency added to an already bearish mood in a market facing excess supplies. Soft commodity markets will shut for the Good Friday holiday on March 30. The US markets will open at a later than usual 7:30 a.m. EDT (1130 GMT) on Monday, April 2, while the London markets will remain closed on Monday and reopen for regular trade on Tuesday, April 3.
May raw sugar settled down 0.33 cent, or 2.6 percent, at 12.21 cents per lb, after falling to 12.18 cents, the weakest for the front month since September 2015. Total open interest rose to a 10-year high at 974,778 lots on Tuesday, ICE data showed. Speculators are holding a large net short position. Dealers said prices were weighed down partly by a firmer dollar and macroeconomic concerns, with global shares toppling again.
A fall in Brazil's currency to a 3-1/2-month low against the dollar was expected to trigger more selling in the world's top producer by making prices more attractive in local currency terms. Commodity analysts at Green Pool sharply raised their 2017/18 and 2018/19 global sugar surplus forecasts.
"The deepening discounts in the futures spreads are very bearish," Commonwealth Bank of Australia analyst Tobin Gorey said in a market note. The October 2018 discount to March 2019 widened to as much as 1.41 cents from 1.05 cents two days prior. May white sugar settled down $8.10, or 2.3 percent, at $347.80 per tonne.
May New York cocoa settled up $43, or 1.7 percent, at $2,597 per tonne, trading in a wide range after falling to $2,490. The spot contract has risen 15 percent in March so far, on track for its strongest monthly gain since February 2015, on diminishing crop forecasts. May London cocoa settled up 26 pounds, or 1.5 percent, at 1,796 pounds per tonne, after falling to 1,722 pounds.
May arabica coffee settled down 1.2 cent, or 1 percent, at $1.1775 per lb. Total open interest rose for the 12th straight session to a record 275,252 lots on Tuesday, ICE data showed. "Traders anticipate big crops from Brazil and from Vietnam this year and have seen no reason to cover the short position in a big way," said Jack Scoville, a vice president with Price Futures Group in Chicago. May robusta coffee settled down $6, or 0.4 percent, at $1,729 per tonne.