Robusta coffee prices on ICE fell on Wednesday to a fresh nine-year low as sales by Vietnamese exporters increased, while raw sugar prices sank as supply concerns weighed and chart signals weakened.
July robusta coffee settled down $5, or 0.4%, at $1,290 per tonne, after earlier plunging to $1,267, the lowest since March 2010.
Exporters from top-grower Vietnam holding large physical stocks of unhedged coffee have been tempted back into the futures market to lock in prices before they fall further, dealers said.
This was the fourth straight session that the contract was in technically oversold territory on the relative strength index.
Meanwhile, the harvest in Brazil, the world's second-largest robusta grower, is underway and expected to be strong, exacerbating concerns about an oversupply. The harvest of arabica is expected to accelerate in the coming weeks.
July arabica coffee settled up 0.55 cent, or 0.6%, at 88.55 cents per lb after dropping to a 13-1/2-year low of 87.60 cents on Tuesday.
Prices got some support from short-covering, dealers said, as well as from a firmer Brazilian currency.
July raw sugar settled down 0.3 cent, or 2.5%, at 11.65 cents per lb, the weakest since early October.
Dealers were watching 11.55, the low for the now expired May contract, as support.
The July contract broke below 12 cents last week, after trading above 12 for almost all of 2019. The fall below that psychological support helped sour the contract's technical picture, dealers said.
Dealers were closely watching for signals out of Brazil on its sugar mix, or the amount of cane dedicated to the production of sugar rather than ethanol.
"The market is concerned for the possibility of a potential 'miss' on the mix figure for this year's Brazil campaign," Thomas Kujawa, co-head of the softs department at Sucden Financial wrote in a note.
Brazilian cane mills appear to have scrapped plans to boost sugar production this year, reverting to a heavy focus on ethanol in a shift from the start of the year, according to millers and analysts.
Total open interest climbed to an eight-month high of 960,539 lots on Tuesday, ICE data show, with dealers anticipating an increase in the speculative short position.
ICE August white sugar settled down $6.60, or 2%, at $321.70 per tonne.
July London cocoa settled down 17 pounds, or 1%, at 1,719 pounds per tonne.
July New York cocoa settled up $4, or 0.2%, at $2,305 per tonne.
Comments
Comments are closed.