LONDON: Raw sugar on ICE fell on Tuesday as a short-covering rally ran out of steam after taking prices to a 1-1/2-month top last week, while coffee prices slid.
SUGAR
July raw sugar dipped 0.04 cent or 0.2pc to 12.64 cents per lb by 1418 GMT. Prices hit a 1-1/2-month high of 12.78 cents on Friday, but have been heading lower this week.
Sugar has been supported of late by dry weather in India, a top sugar grower, and by surging corn prices, though these retreated on Tuesday.
Concerns that the U.S.-China trade war is hurting global growth returned to the wider financial markets, weighing on sugar.
"We are currently pausing as some of the positive factors are being priced in. The market is also facing increased producer selling near 13 cents/lb," said Patrice Bougault, managing director at La Trinité Asset Management.
Still, Brazilian sugar mills are closely watching the 2019 U.S. corn crop for reduced harvests that could boost prices for the cereal, raising ethanol production costs there and opening room for Brazilian ethanol to gain domestic market share.
In that scenario, mills would heavily favour ethanol production at the expense of sugar.
Elsewhere, the EU's crop monitoring service MARS lowered its yield estimate for sugar beet to 75.7 tonnes per hectare from 76.5 t/ha.
August white sugar rose $1.20, or 0.3pc, to $334.20 per tonne.
COFFEE
September arabica coffee fell 0.7 cent, or 0.7pc, to 97.55 cents per lb, having hit a three-week low of 97.05 cents on Monday.
Prices plunged about 5.3pc last week amid renewed concerns about oversupply in top grower Brazil and a technical market structure that rewards sellers.
September robusta coffee fell $19, or 1.4pc, to $1,367 per tonne.
COCOA
September London cocoa rose 11 pounds, or 0.6pc, to 1,851 pounds per tonne.
The contract hit an 11-month high last Wednesday as top growers Ivory Coast and Ghana announced plans to set a floor price for cocoa.
Bad weather and crop disease have also hampered the cocoa crop in Ghana.
September New York cocoa rose $15, or 0.6pc, to $2,495 per tonne.
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