Liffe sugar and coffee lower

Sugar and coffee futures reversed down on Wednesday, as investors were cautious over the outlook for global economic growth and world stocks neared five-month lows. Cocoa futures fell to seven-week lows as risk averse sentiment continued to weigh on the commodities complex.
The pace of growth in the US services sector ticked down unexpectedly in July to the lowest level since February 2010, while the number of jobs created by the private sector also slowed, separate reports showed. "The macro (economic picture) is not pretty so commodities in general are slumping," one US dealer said. Raw sugar futures reversed earlier gains as the market consolidated after correcting lower in recent sessions and falling below the key 200-day moving average that added to its bearish sentiment.
Repeated downgrades to the size of top producer Brazil's cane crop have also been a supportive factor for prices in recent weeks. "We are now well advanced in Brazil's season and the weather has returned to more normal conditions, so it's unlikely the numbers will change drastically," Sebag said.
October white sugar on Liffe fell $22.00, or 2.9 percent, to $730.30 per tonne. Dealers said high sugar prices were curbing demand as buyers delayed purchases after the raws hit a five-month peak at 31.68 cents per lb late last month. With sugar prices trading at high levels, some dealers questioned whether these prices were sustainable.
"Brazilian and Thai producers may become braver in their pricing strategies, and this together with more fund liquidation should put more pressure on flat price and nearby structure in the coming weeks," Nick Penney at brokerage Sucden said. Cocoa futures finished weak in a steady 8 percent decline on ICE in the past two weeks, as dealers continued to focus on September/December spreads.
"There's a lot of outside noise affecting investor sentiment," a London-based broker said. Dealers said the market was underpinned by expectations of a fall in West African 2011/12 production after ideal weather and increased crop maintenance led to a bumper 2010/11 crop. Technically, the market remained weak after falling well below the long-term moving averages that recently crossed with short-term levels several times.
Liffe September cocoa dropped 18 pounds to finish at 1,836 pounds a tonne, the weakest close since June 17. "I don't think they're chasing it towards the lower end of the range ... but at some point they (Brazil) will have to sell something," said a London-based broker. Technically, the 200-day moving average above the market kept prices rangebound, dealers said. "The macro and poor economic data all over are driving risk off the market and we should have another leg down," another US dealer said. September robusta coffee on Liffe fell $30 to $2,090 per tonne.