LONDON: Raw sugar futures fell to a two-month low on Tuesday on technically-driven fund selling as the market tested support around 20 cents a lb on the March contract.
March raw sugar was off 0.35 cents, or 1.7 percent, at 20.00 cents a lb at 1524 GMT after dipping to a low of 19.94 cents, the weakest for the front month since Sept. 12.
"The short term trend is lower and we expect further liquidation of speculative longs into the Thanksgiving holiday and as the end of the financial year approaches," said Sucden Financial senior trader Nick Penney.
Prices have now fallen around 16 percent from a peak of 23.90 cents in early October as funds scaled back longs.
The speculative net long stood 213,006 lots, as of Nov. 15, down from 290,127 lots on Oct. 4, according to CFTC data, and dealers said they believed it had fallen further during the last few days.
Dealers said some investors were taking funds out of soft commodities with other options such as equities performing more strongly at the moment.
March white sugar fell $7.20, or 1.3 percent, to $531.10 per tonne.
Dealers noted funds had also been scaling back long positions in both robusta and arabica coffee.
"Funds are questioning long positions at the moment," one London coffee dealer said.
"Brazil (crop) weather looks to be excellent and if the market is not going to rally further there is a pretty significant fund long which is sitting there," he added. January robusta coffee was up $14 or 0.7 percent at $2,097 a tonne in a modest bounce after the prior session's steep decline.
The contract had fallen $69, or more than 3 percent, on Monday.
Arabica coffee prices also edged higher with March up 0.15 cent or 0.1 percent at $1.6340 per lb. Cocoa futures were higher with prices pulling away from last week's lows.
March New York cocoa was up $16, or 0.7 percent, at $2,447 a tonne.
The second position fell to a low of $2,358 last week, its weakest since August 2013. Dealers said the market had become oversold following a prolonged slide but the overall downtrend remained intact amid favourable crop weather in top grower Ivory Coast and the prospect of a global surplus in the 2016/17 season.
March London cocoa rose 18 pounds or 0.9 percent to 2,013 pounds a tonne.
Comments
Comments are closed for this article.