NEW YORK/LONDON: Raw sugar futures rallied on Monday after US data showed speculators trimmed their bullish position for the fourth straight week and as traders focused on a looming production deficit, while arabica coffee fell to a four-week low.
London cocoa prices extended losses on pressure from the firm pound, briefly touching a three-week low while the New York market held just above the prior session's 3-1/2-month low, as global demand concerns remained.
Bucking the weak session in larger commodity markets , October raw sugar settled up 0.3 cent, or 1.5 percent, at 19.89 cents per lb.
Raw sugar futures were underpinned by a softer dollar and Friday's Commitments of Traders data showing that speculators took their net long position further away from last month's record high, but only slightly.
"The position is still large and represents almost 30 percent of overall open interest," said Nick Penney, a senior trader at Sucden Financial Sugar.
Sugar prices have been supported by a shift into deficit after years of surpluses.
October white sugar settled down 30 cents, or 0.06 percent, at $537.50 per tonne.
Arabica coffee futures extended losses after Friday's sell-off following a deal between the Colombian government and truckers' unions to end a 45-day strike that has hit coffee exports and pushed inflation even higher.
September arabica settled down 0.8 cent, or 0.6 percent, at $1.411 per lb, while September robusta settled down $2, or 0.1 percent, at $1,786 per tonne.
"All we've done is downplay the crop size this year, talk about the robusta beans that are going to be decimated," said James Cordier, founder of OptionSellers.com based in Tampa, Florida.
"The Brazilian coffee production is going to be higher than people were estimating."
September London cocoa settled down 37 pounds, or 1.6 percent, at 2,347 pounds per tonne.
"London prices will remain above our current forecast for prices to average 2,130 pounds/tonne in 2016," said BMI Research in a note, adding that the weakness in sterling following the U.K.'s vote last month to leave the European Union will support prices through 2016.
BMI said that London cocoa prices have been outperforming the New York market since the June 23 vote, underpinning its view for price support to come from the exchange rate of the British pound to the US dollar rather than market fundamentals.
September New York cocoa settled down $32, or 1.1 percent, at $2,854 per tonne.
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