Raw sugar futures on ICE hit 12-1/2-year lows on Monday as oil prices resumed their plunge, renewing worries Brazil might ramp up sugar output instead of ethanol, and as the Brazilian real remained near record lows.
May raw sugar ??fell 0.33 cents, or 3.4%, to 9.40 cents per lb at 1539 GMT, having earlier hit its lowest level since September 2007 at 9.32.
Oil prices slumped again on concerns over scarce storage capacity, especially in the United States, and global economic doldrums caused by the coronavirus pandemic.
Falling energy prices tend to prompt cane mills in Brazil to ramp up sugar output at the expense of ethanol, a cane based biofuel.
"There appears to be no respite for the sugar market at the moment," said a dealer. He noted a drop in global consumption due to coronavirus lockdowns seems inevitable, Brazilian sugar output is rising and there seems little hope the real will recover given the political turmoil.
Speculators added 16,912 contracts to their sugar short bet on ICE Futures US in the week to April 21, taking the total net short to 60,063 contracts, CFTC data showed.
The Brazilian real remained near record lows, making dollar-denominated sugar export deals more attractive to Brazilian mills by raising returns in local currency terms.
August white sugar fell $8.80, or 2.8%, to $308.60 a tonne, having hit its lowest since September last year.
July arabica coffee slipped 0.1 cents, or 0.1%, to $1.0665 per lb, having hit a one-month low on Friday.
Speculators slightly raised their net long position in arabica coffee futures by 260 contracts to 10,079 in the week to April 21, CFTC data showed.
Coffee is losing steam, with consumer stockpiling ahead of coronavirus lockdowns having eased and with concerns creeping in about the long-term impact of the virus on economic growth.
The weakening Brazilian currency is also weighing on coffee, driving exports of the dollar-priced commodity.
Uganda's coffee exports surged 37% in March from a year ago, boosted by newly maturing trees, according to its coffee regulator UCDA.
July robusta coffee fell $3, or 0.3%, at $1,141 a tonne.
July New York cocoa was flat at $2,324 a tonne.
Cocoa arrivals at ports in top grower Ivory Coast reached 1.734 million tonnes between Oct. 1 and April 26, down 5% from the same period last season.
Well below average rainfall last week in most of Ivory Coast's cocoa regions has reduced expectations of a healthy mid-crop marketed from April to September.
Speculators trimmed net short positions in ICE cocoa, cutting 1,493 contracts to a net short of 14,233 lots in the week to April 21, CFTC data showed. July London cocoa fell 7 pounds, or 0.4%, to 1,882 pounds per tonne.
Comments
Comments are closed for this article.