LONDON: Raw sugar futures on ICE fell on Thursday as weak chart signals and enduring pressure from bearish speculators dragged prices back towards 16-month lows touched a day earlier.
SUGAR
July raw sugar was down 0.14 cents, or 1.04 percent, at 13.48 cents per lb by 1123 GMT, after hitting a session low of 13.44 cents.
Prices tumbled to a 16-month low of 13.36 cents in the previous session as weak technicals and a bearish fundamental backdrop prompted funds to add to their short positions.
While this has pushed prices into technically oversold territory, dealers said the market's failure to gain a foothold over recent support levels reinforced bearish chart signals and paved the way for renewed low-volume selling on Thursday.
"It's all looking a little bit down in the dumps at the moment and unfortunately the funds are really going for it," said one dealer. "The funds will add to their shorts if we go through the lows. And we're not far from those lows."
Brazil's state-controlled oil company Petroleo Brasileiro also further cut its average gasoline and diesel prices on Wednesday, reducing the competitiveness of ethanol for Brazilian producers and adding to the bearish mood in the sugar market.
Market participants were also monitoring an options expiry in New York on Thursday.
August white sugar fell $2.60, or 0.65 percent, to $399.00 a tonne.
The United States and Mexico on Wednesday finalised a sugar trade pact that seeks to resolve a years-long dispute between the governments.
COFFEE
September arabica coffee rose a marginal 0.10 cents, or 0.08 percent, to $1.2785 per lb, but remained just above a one-year low of $1.2755 touched in the previous session.
"We have seen increasing buying pressure in recent weeks," said Sucden Financial's Geordie Wilkes, noting the market's inability to hold above the $1.30 mark has led to a test of lower support levels.
July robusta edged up $10, or 0.49 percent, to$2,048 a tonne, with dealers noting there was appetite to test higher prices.
Indonesian coffee discounts stayed flat amid high supply this week, while the Vietnam beans market was quiet despite higher prices, traders said on Thursday.
COCOA
Cocoa futures were little changed, with September New York cocoa down a marginal $2, or 0.10 percent, at $2,073 a tonne.
September London cocoa was up 1 pound, or 0.06 percent, at 1,639 pounds a tonne.
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