NEW YORK/LONDON: Cocoa futures on ICE fell on Tuesday, as prices extended their correction lower, dropping for the third straight session following last week's grind data while the New York market felt additional pressure from the weak British pound.
Sugar prices rallied after data showed Brazilian mills reduced output in favor of ethanol in early October, lifting the March raw sugar contract to its biggest one-day rally in nearly two months.
COCOA
December New York cocoa settled down $40, or 1.9 percent, at $2,084 per tonne.
Most of the selling pressure was on the December contract that returned to a $5 discount versus March, down sharply from the $15 premium three sessions prior and potentially signaling lackluster nearby demand.
Pressure came from the weak pound against the US dollar, producer selling and a corrective move lower after rallying prior to last week's grind data, traders said.
December London cocoa settled down 19 pounds, or 1.2 percent, at 1,561 pounds per tonne.
SUGAR
March raw sugar settled up 0.4 cent, or 2.9 percent, at 14.28 cents per lb, remaining well within the past month's price range.
The market rose after data from Brazil's Unica showed Brazilian mills in the center-south region increased the amount of cane used for ethanol production in the first half of October, and reduced sugar output, taking advantage of better pricing for the biofuel as sugar prices remain weak.
December white sugar settled up $6.70, or 1.8 percent, at $374.80 per tonne.
COFFEE
December arabica coffee settled down 1.15 cents, or 0.9 percent, at $1.232 per lb, after nudging down to $1.2285, the weakest for the spot contract since June 28.
Focus remained on Brazil, where crop-friendly rains have arrived, although price weakness was limited as traders waited to see if they will be enough to relieve dryness and ensure flower pollination in the key coffee areas.
Rabobank revised down its global 2017-18 coffee deficit forecast to 4.9 million bags from 6.1 million bags, and forecast a 2016-17 surplus of 1.1 million bags compared with a 200,000-bag deficit.
January robusta settled down $23, or 1.2 percent, at $1,945 per tonne, as concerns about delayed shipments from top grower Vietnam eased on improving weather.
"The weather is great in Vietnam for the moment," said one dealer. "We expect the crop to be shipped from mid-November, which is not bad at all."
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