LONDON: New York cocoa futures fell to their lowest level in more than three weeks on Wednesday as funds increased short positions against the backdrop of surplus supplies while sugar and arabica coffee were little changed.
COCOA
September New York cocoa was down $6, or 0.3 percent, at $1,912 a tonne by 1131 GMT, having dipped to a low of $1,903, its weakest since May 26.
Dealers said the market was back on the defensive after a short-covering rally ran out of steam early last week with news that Ghana's main crop had climbed to a six-year high, adding to concerns about excess supplies this season.
"There aren't a lot of bullish arguments other than the fact we've come down a long way," one dealer said.
Dealers said that volumes were light and the market did not appear to have a lot of downside momentum.
"It is not surprising the market is a little bit on the backfoot, but we are not seeing any knockout punches," one dealer said.
September London cocoa fell 16 pounds, or 1.03 percent, to 1,540 pounds a tonne, with a surge in the value of sterling adding to downward pressure.
SUGAR
July raw sugar was off 0.04 cents, or 0.29 percent, at 13.57 cents per lb as the market continued to consolidate just above Friday's 16-month low of 13.29 cents.
Dealers said prices were pressured partly by weakness in the energy sector, with crude oil prices falling to a seven-month low on Wednesday.
"Continued weakness in the energy complex has added a bearish tone to the commodity basket," Sucden Financial senior trader Nick Penney said in a market note.
August white sugar rose $0.20, or 0.05 percent, to $407.70 a tonne, outperforming July raws.
"This may be purely technical, given the low liquidity seen recently, but may also reflect demand improving for the post-Ramadan period," Penney said.
COFFEE
September arabica coffee was down 0.10 cents, or 0.1 percent, at $1.2450 per lb. The second position dipped to a low of $1.2330 on Tuesday, its weakest since June 1 last year.
Dealers said the market had been weighed down by bearish chart formations but there remained scope for a bounce in the near future with funds holding large net short positions.
September robusta coffee was up $8, or 0.39 percent, at $2,082 a tonne.
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