LONDON: Raw sugar futures slipped on Tuesday, hitting a 2-1/2 month low as deteriorating technicals and a weaker Brazil currency weighed on the market, while arabica coffee hovered above 5-1/2 month lows set a day earlier.
SUGAR
March raw sugar was down 0.09 cent, or 0.7 percent, at 13.86 cents per lb by 1428 GMT, after hitting 13.82 cents, the weakest for the front month since Sept. 26.
Dealers said the technical structure was weakened when prices struggled to gain a foothold above the 14 cent mark.
Speculative short-selling also seemed to reinforce the downtrend, despite more upbeat energy markets, they said.
"The sugar bulls have the oil market as an ally but not much else it seems," Nick Penney, senior trader at Sucden Financial said in a note. "The sugar bears continue to have the upper hand it seems."
A further weakening in the Brazilian real added pressure as it encourages producers to sell by improving their local currency returns.
March white sugar fell $1.70, or 0.5 percent, to $363.80 a tonne.
France sharply raised its estimate of sugar beet production in 2017 to a record 45.0 million tonnes, up from 42.6 million projected a month ago and 30 percent above 2016 output.
COFFEE
March arabica coffee was up 0.70 cents, or 0.6 percent, at $1.207 per lb.
Prices fell sharply in the previous session to $1.1955, the weakest for the second position since June 23.
Dealers said chart weakness had triggered a wave of speculative selling but the pressure had eased on Tuesday, lending some support.
"At the moment, the funds are in control of the market," one dealer said, adding that the market remained vulnerable to further short-selling.
January robusta coffee was down $9, or 0.5 percent, at $1,719 a tonne.
COCOA
March London cocoa was down 5 pounds, or 0.4 percent, at 1,424 pounds a tonne.
The market was consolidating after sharp gains in the previous session as a wave of speculative short-covering pushed prices off 7-1/2 month lows set last week.
The December contract, which expires on Tuesday, moved to a discount of more than 120 pounds relative to the March position in early trade on Tuesday.
Spot prices have been weighed down by reluctance to take delivery amid expectations that relatively old cocoa could be tendered from less desirable origins such as Cameroon.
March New York cocoa was down $5, or 0.3 percent, at $1,907 a tonne.
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