LONDON: Raw sugar and arabica coffee futures were lower on Wednesday, depressed partly by the weakness of the currency of Brazil, the top producer of both commodities. A weaker Brazilian real boosts dollar-denominated prices in local currency terms and can encourage producer selling.
SUGAR
July raw sugar was down 0.07 cents, or 0.5 percent, to 12.83 cents per lb at 1343 GMT, as the market remained locked in a narrow trading band with solid support below 12.50 cents but heavy resistance above 13 cents.
Dealers noted both ends of the range were tested last week and prices now appear to have drifted back towards the middle of the band.
"Once more sugar keeps trying to break out of its range and keeps failing at both extremes. The reason is that ethanol is pulling sugar up and sugar fundamentals are pulling it down," Marex Spectron analyst Robin Shaw said.
Recent strength in energy markets has increased the incentive to use Brazilian cane to make biofuel ethanol rather than sugar but there remains concern about high stocks, particularly in India and China.
Dealers said cane crush data for Centre-South Brazil covering the first half of April was expected to be released later this week.
A survey of analysts conducted by S&P Global Platts saw a cane crush of 16.5 million tonnes, down 26 percent year-on-year and the lowest volume for the period since 2015/16. August white sugar was down $0.40, or 0.1 percent, at $337.80 a tonne.
Associated British Foods, parent of British Sugar, said almost zero first half profit from sugar represented the "low water mark" for the business, forecasting an improved performance as prices pick up.
COFFEE
July arabica coffee fell 1.0 cent, or 1.1 percent, to 92.25 cents per lb, heading back down towards last week's 13-1/2 year low of 89.00 cents.
Dealers said a weak Brazilian real added a further bearish influence on a market already weighed by excess supplies and a generally favourable outlook for the harvest in the world's top producer and exporter. July robusta coffee fell $1, or 0.1 percent, to $1,398 a tonne.
COCOA
July London cocoa fell 28 pounds, or 1.6 percent, to 1,703 pounds per tonne, Dealers said the market was on track to fall for a third consecutive session after a short-covering rally which saw the July contract climb to a 3-1/2 month peak of 1,786 pounds on April 18 ran out of steam. July New York cocoa was down $51, or 2.2 percent, at $2,241 per tonne.
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