Raw sugar turns lower after hitting 5-month high; coffee down
- Cocoa prices in New York regained impetus and closed in the highest level since March 13.
- October white sugar settled down $5.40, or 1.4%, at $372.30 a tonne.
NEW YORK/LONDON: Raw sugar and coffee futures closed lower on Friday after a rebound in the dollar helped to stall the recent run-up for both products.
Cocoa prices in New York regained impetus and closed in the highest level since March 13.
SUGAR
October raw sugar settled down 0.27 cents, or 2.1%, at 12.67 cents per lb, after setting a five-month high of 13.00 cents earlier in the session.
Dealers said diminishing outlooks for production in Thailand and Mexico and strong demand from Asia may be creating a more supportive fundamental backdrop for the market.
"The rally is prompting some to re-assess sugar's fundamentals. And we think there are a few production issues that are rightly on the radar, not least the increasing likelihood that Thailand's production will again be well below capacity," Commonwealth Bank of Australia analyst Tobin Gorey said in a note.
The global 2020-21 (Oct-Sept) sugar supply balance is seen at a deficit of 1.3 million tonnes compared with a June estimate for a 0.5 million-tonne surplus, broker and consultancy StoneX said on Thursday.
October white sugar settled down $5.40, or 1.4%, at $372.30 a tonne.
COFFEE
December arabica coffee settled down 1.05 cents, or 0.9%, at $1.179 per lb, getting further away from a four-month high of $1.2890 set on Wednesday.
One Chicago-based broker said that despite the recent spike in prices, there is a large surplus looming in the market as consumption is likely still below last year's.
He said the weak Brazilian currency continues to keep prices attractive for growers in the largest producer, making it unlikely that next year's crop would fall much from this year's.
November robusta coffee settled up $10, or 0.7%, at $1,363 a tonne.
COCOA
December London cocoa settled up 30 pounds, or 1.8%, to 1,715 pounds per tonne, a six-week high.
Dealers said the market's recent run-up had helped to create a more bullish outlook on price charts but the prospect of a global surplus in the 2020/21 season should help to cap gains.
December New York cocoa settled up $29, or 1.2%, to $2,523 a tonne, the highest price since March 12.
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