LONDON: Raw sugar futures fell on Thursday as speculative selling emerged against a backdrop of a weaker Brazilian currency, while a weaker British pound boosted London cocoa prices.
SUGAR
March raw sugar was down 0.10 cent, or 0.7 percent, at 14.08 cents per lb by 1400 GMT, reversing earlier gains as the Brazilian real resumed its downtrend.
Dealers noted speculators had begun selling in light volume as prices came under pressure again from a weaker real.
"The rally didn't hold and I think some producers took advantage of it," one dealer said. "And since then it's been undone by the currency weakness."
A weaker Brazilian currency typically encourages selling by producers since it boosts returns in local currency terms from dollar-denominated commodities like sugar.
Dealers also noted the market was technically vulnerable, after it failed to climb above the 50-day moving average.
"It has technically failed to advance," the dealer said. "To shake the tree here, we've got to get above quite a lot of (technical) averages that are above the market. If we can get through there, we might get some short covering."
December white sugar fell $3.00, or 0.8 percent, to $371.10 a tonne, with dealers noting the recent climb in prices had also spurred hedging by EU producers.
COFFEE
December arabica coffee fell 0.65 cent, or 0.5 percent, to $1.2345 per lb, hovering just above a four-month low touched this week as the Brazilian real weighed.
Supplies of prompt Brazilian coffee have tightened in the United States and Europe as importers say some shipping companies are cutting container availability from the world's biggest grower.
November robusta coffee fell $16, or 0.8 percent, to $1,994 per tonne.
Prices have been pressured by waning worries that wet weather in top grower Vietnam could delay the harvest.
Vietnam is expected to see intermittent rainfall over the next 10 days, which together with recent crop-friendly rains may affect harvesting, traders said on Thursday.
COCOA
December London cocoa gained 18 pounds, or 1.2 percent, to 1,566 pounds a tonne, reversing the previous day's losses as the British pound slumped.
December New York cocoa rose $23 or 1.1 percent, to $2,102 a tonne, climbing in step with London.
Comments
Comments are closed for this article.