NEW YORK/LONDON: Arabica coffee futures on ICE fell to a six-week trough on Wednesday and raw sugar slid to the lowest since early September as the currency in top grower Brazil fell against the US dollar and funds further scaled back long positions. Cocoa prices were little changed.
New York cocoa, arabica coffee and raw sugar markets will be shut on Thursday for the US Thanksgiving holiday but Europe-based white sugar, robusta coffee and London cocoa markets will be open.
March arabica coffee settled down 4.15 cents, or 2.6 percent, at $1.577 per lb. The weak Brazilian real often pressures arabica and raw sugar prices as it encourages producer and fund selling. "I think the selling that has come in is a little bit of profit-taking.
Specs are just lightening the load," one London dealer said, adding some were looking to lock in positive annual returns and would re-evaluate their strategy in the New Year. January robusta coffee settled down $53, or 2.5 percent, at $2,046 per tonne, with harvest in top grower Vietnam underway. March raw sugar settled down 0.17 cent, or 0.9 percent, at 19.58 cents per lb, the weakest for the spot contract since Sept. 1.
"The investor long, the overwhelming majority of which is momentum-based, has the autopilot set to sell," said analyst Tobin Gorey of Commonwealth Bank of Australia. "In the light of that most buyers will think they can afford to be patient. Momentum investors' positions are of course finite so they will eventually clear the position - we think they still have more to do for now."
The global sugar market faces a 2016-17 deficit of 5.28 million tonnes, Green Pool Commodity Specialists said, smaller than the 5.80 million tonne shortfall they forecast previously.
March white sugar settled down $4.10, or 0.8 percent, at $522.40 per tonne.
Cocoa futures were lower with an improving crop outlook in top grower Ivory Coast. March New York cocoa settled down $1, or 0.04 percent, at $2,439 per tonne, while March London cocoa settled down 2 pounds, or 0.1 percent, at 2,007 pounds per tonne. In its Outlook 2017 report, Rabobank forecast a second straight global cocoa surplus in 2017-18.
"The volume sales of chocolate are stabilizing in Europe and especially in the US," Rabobank said, following lackluster demand in 2016. "We believe that sales of chocolate and chocolate-flavored products may be doing rather well in Asia."
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