LONDON: Raw sugar futures fell on Monday, with the recent run-up stalled by producer selling, while a higher global surplus forecast by the International Sugar Organization (ISO) reinforced concerns about oversupply.
SUGAR
July raw sugar fell 0.09 cents, or 0.7pc , to 12.41 cents per lb by 1421 GMT.
The contract rose 3.3pc last week for its third straight positive weekly finish.
Dealers said producer selling above 12.50 cents had, however, helped to stall the recent run-up.
"We are at a critical stage attempting to reimpose a 12.50/13 cent range, but the tops formed late last week now present resistance, with late producer selling massing above it ahead of expiry in three weeks' time," Sucden Financial senior trader Nick Penney said in a market note.
Sugar price falls were limited, however, as funds continued to cover shorts.
"We do feel that the funds are still in buyback mode. But it has to be emphasised that a rally now is the most bearish thing that could happen, because it encourages more supply, which is the last thing we need," Marex Spectron said in a note.
Speculators reduced their net short position on ICE Futures US sugar for the first time in six weeks over the week to June 4, data showed.
The ISO forecast a global sugar surplus of 1.83 million tonnes in the 2018/19 season, up from a previous estimate of 641,000 tonnes.
The inter-governmental body also said there could be a swing to a 3 million tonne deficit for 2019/20 but added that any price recovery on the back of the deficit would be muted by huge surplus stocks.
August white sugar fell by $2.50, or 0.7pc , to $335.10 a tonne.
COFFEE
July arabica coffee fell 0.95 cents, or 0.9pc , to $1 per lb.
Prices fell 3.5pc last week after two consecutive weeks of increases that took them off the 13-1/2 year low hit in May.
"100 cents is a better level; 88, 89 cents (was) unjustifiable. The funds had unjustifiable short positions. I would hope we've found a new floor," one dealer said.
Speculators reduced their net short position in arabica coffee on ICE Futures US to its lowest level this year in the week to June 4, data showed.
July robusta coffee fell $7, or 0.5pc , to $1,423 a tonne.
COCOA
July New York cocoa rose $25, or 1pc , to $2,503 a tonne, having touched an 11-month peak of $2,515. The contract rose 3.3pc last week.
Speculators reduced their bearish stance on ICE Futures US cocoa by 647 contracts to 1,936 contracts in the week to June 4.
Cocoa prices have been buoyed by signals of strong global demand and concerns about reduced Ghana output.
July London cocoa rose 21 pounds, or 1.2pc , to 1,819 pounds a tonne, having hit its highest since mid-May.
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