Raw sugar falls as fund short covering runs out of steam

• Raw sugar futures on ICE fell on Monday as speculators paused their short covering.
• "The market continues to consolidate and there is little reason to believe this will not continue in the short term. The funds are still heavily short,"

LONDON: Raw sugar futures on ICE fell on Monday as speculators paused their short covering, having pushed prices up 10pc last week against a backdrop of tightening supplies.

Cocoa prices also fell as funds trimmed their long positions.

SUGAR

March raw sugar was down 0.1 cents, or 0.9pc, at 12.65 cents per lb by 1154 GMT. The contract ended last week up 10pc as speculators slashed their large net short positions.

Hedge funds and other money managers cut their net short position in ICE raw sugar in the week to Oct. 1 by 55,056 contracts to 163,276.

A smaller than expected delivery against the October contract that expired last week spooked speculators, prompting them to cover their short positions.

"The market continues to consolidate and there is little reason to believe this will not continue in the short term. The funds are still heavily short," said a dealer.

December white sugar was down $1.90, or 0.6pc, at $343.60 a tonne.

COCOA

December New York cocoa was down $36, or 1.5pc, at $2,438 a tonne after rising last week to a peak of $2,535, the highest price since July 24.

Speculators on ICE switched to a net long position on New York cocoa of 3,260 contracts in the week to Oct. 1.

"That long position is susceptible to a squeeze on the downside. We've got a substantial carry from the (Ivory Coast) mid-crop," said a dealer.

March London cocoa was down 22 pounds, or 1.2pc, at 1,876 pounds a tonne, having hit a three-month high last week.

COFFEE

December arabica coffee fell 1.4 cents, or 1.4pc, to 97.60 cents per lb, having hit its lowest in nearly two weeks at 97.50.

The market remains on the defensive due to ample supplies following two seasons when production outstripped demand.

Arabica speculators on ICE trimmed their net short position by 2,313 contracts to 40,535 in the week to Oct 1. .

November robusta coffee was down $20, or 1.6pc, at $1,272 a tonne, having hit its lowest in nearly a month at $1,270.