Raw sugar futures on ICE sank to four-month lows on Monday as crude oil prices tumbled as much as 33% after Saudi Arabia launched a price war with Russia following the collapse of their three-year supply pact. Cocoa prices hit two-month lows and arabica coffee plumbed a one-month trough but later recovered.
May raw sugar dropped 0.43 cents, or 3.3%, to 12.58 cents per lb at 1301 GMT after hitting a more than four-month low of 12.18 cents. Oil prices suffered their biggest daily rout since the 1991 Gulf War as Saudi Arabia and Russia signalled they would increase output in a market already awash with crude.
"The main driver is speculative long liquidation," Sucden Financial said in a note. It added, however: "Should the spat between Russia and Saudi Arabia subside, and/or coronavirus cases begin to diminish, sugar traders are going to be asking themselves whether a 300-point drop is justified. The (futures) structure still points to tightness."
Sugar speculators on ICE cut their net long positions in the week ended March 3 by 43,544 contracts to 74,267, CFTC data showed. May white sugar fell $15.30, or 4.2%, to $355.00 a tonne, having hit a three-month low of $348.10.
May New York cocoa was down $1, or 0.1%, at $2,560 a tonne after hitting its lowest since early January at $2,509. Cocoa speculators on ICE cut their net long positions in the week ended March 3 by 8,282 contracts to 33,277, CFTC data showed.
The International Cocoa Organization (ICCO) on Friday forecast a global cocoa deficit of 85,000 tonnes in the 2019/20 season. A Reuters poll in late January gave a median forecast for a deficit of 70,000 tonnes. Cocoa arrivals at ports in top grower Ivory Coast reached 1.567 million tonnes between Oct. 1 and March 8, exporters estimated, up 0.1% from the same period last season.
May London cocoa fell 32 pounds, or 1.7%, to 1,855 pounds a tonne after setting a two-month low of 1,838 pounds. May arabica coffee rose 2 cents, or 2.1%, to $1.0955 per lb, having touched its lowest in a month at $1.0255.
Arabica speculators on ICE cut their net short positions in the week ended March 3 by 13,000 contracts to 3,229, CFTC data showed. May robusta coffee was down $11, or 0.9%, at $1,234 a tonne.
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