Raw sugar recedes after near 3-month peak; coffee mixed

NEW YORK/LONDON: Raw sugar futures on ICE closed down on Monday, receding after setting the highest level in almost three months earlier in the session.

Coffee closed mixed, with arabica flat and robusta posting strong gains.

SUGAR

July raw sugar settled down 0.08 cents, or 0.7%, at 11.94 cents per lb after peaking at 12.27 cents, the highest level for the front month since March 11.

Dealers said the recent recovery in other markets, including global equities and crude oil, have given a significant boost to sugar prices recently.

The rally "is entirely based on a rush to buy 'risk on' assets and sugar is one of those," analyst Robin Shaw of Marex Spectron said in a note.

Shaw said market fundamentals were less supportive at current prices because it is more attractive for mills in Center-South Brazil to use cane to make sugar rather than ethanol, which could lead to a considerable global surplus.

August white sugar settled down $5.60, or 1.4%, at $387.30 a tonne.

COFFEE

July arabica coffee closed stable at 98.9 cents per lb.

The arabica market has been pressured by the prospect of a huge crop in Brazil this year and weakening global consumption.

Dealers noted speculators had switched to a net short in the week to June 2.

July robusta coffee settled up $17, or 1.4%, at $1,250 a tonne.

COCOA

July New York cocoa settled up $15, or 0.6%, to $2,413 a tonne with the market underpinned by concerns about dry weather in top grower Ivory Coast.

Rainfall was below average in most of Ivory Coast's cocoa-growing regions last week.

Weak demand, however, remains a bearish influence.

July London cocoa settled down 18 pounds, or 1.0%, to 1,849 pounds per tonne.