Raw sugar extends gains, arabica retreats towards 2-month low

NEW YORK/LONDON: Raw sugar futures on ICE closed up on Monday on signs supplies will tighten and an upbeat sentiment in wider financial markets, while arabica coffee headed lower again.

SUGAR

March raw sugar settled up 0.06 cent, or 0.4%, at 13.61 cents per lb, having gained 4% last week to mark three consecutive weeks of gains.

"We can now see the end of the harvest and there is definitely not going to be a surplus in Brazil. The implication is 2021 will be a re-run of 2020, but with a bit less supply and probably a bit more demand," Marex Spectron said in a note.

Unfavorable weather for sugar production in Russia and Thailand continues to provide support, as well as India's government delay to define its export subsidy policy, dealers said.

December white sugar settled down $0.50, or 0.1%, at $373.20 a tonne.

COFFEE

December arabica coffee settled down 1.75 cents, or 1.6%, at $1.072 per lb, after touching a more than two-month low of $1.0490 on Friday.

ICE speculators reduced their net long position in arabica futures in the week to Sept. 29 by 6,449 contracts to 25,645 contracts.

Coffee is under pressure from strong exports from top producer Brazil after a huge harvest this year.

Dealers said commodities traders are still dealing with high stocks in Brazil after buying large volumes from local farmers. The situation has limited more farmer selling.

Colombian coffee producers must prepare for the La Niña weather pattern, which could bring above-average rainfall, negatively impacting crops and exacerbating coffee rust.

November robusta coffee settled down $22, or 1.7%, at $1,268 a tonne.

COCOA

December London cocoa settled down 8 pounds, or 0.5%, to 1,725 pounds per tonne, having hit a two-week low of 1,707 on Friday.

Cocoa arrivals at ports in top grower Ivory Coast reached 2.074 million tonnes for the year to Sept. 30, down 4.8% from a year earlier.

December New York cocoa settled down $23, or 0.9%, to $2,459 a tonne.