Raw sugar holds above six-year low

Raw sugar futures on ICE hovered above their lowest level in more than six years on Thursday, but gains were capped by the weak currency in top grower Brazil and abundant supplies, while London cocoa fell from an eight-month high. New York cocoa fell for the fourth straight day as the weak British pound attracted selling by speculators. Coffee futures were slightly higher.
Dealers said they expected fluctuations in the Brazilian real and US dollar to drive sugar prices in the short term as the weak real can attract producer and speculative selling in both sugar and coffee futures. "There are not too many fundamental traders who would fight hard to suggest that 12 cents is under-valued fundamentally," said James Cassidy, senior director of Sugar Group at Societe Generale in New York.
July raw sugar futures on ICE settled up 0.07 cent, or 0.6 percent, at 11.94 cents a lb, in a choppy session. This is up from the lowest since January 2009 at 11.83 cents, reached on Wednesday. "Traders can only largely deal with what they know and what they know at present is that production and stocks are ample and easily outstrip demand," said Nick Penney, senior trader with Sucden Financial Sugar.
August white sugar on ICE closed up $1.70, or 0.5 percent, at $347.40 per tonne, after touching a contract low of $345.10. Speculative selling weighed on cocoa futures, but the London market remained in technically overbought territory at around 75 on the 14-day relative strength index. July London cocoa settled down 1 pound, or 0.05 percent, at 2,125 pounds a tonne, after touching the highest since September at 2,131 pounds. The spot contract was on track to finish May up 6.7 percent.
New York July cocoa ended down $16, or 0.5 percent, at $3,118 per tonne, dropping for the fourth straight day from last week's seven-month low on pressure from the weak pound. Total open interest rose for the eleventh straight session on Wednesday to 222,296 lots, the highest since June 5. July arabica coffee closed up 0.65 cent, or 0.5 percent, at $1.2515 per lb, hovering just above Wednesday's lowest level since January 2014 at $1.2355. Robusta coffee rose for the second straight day after tumbling to a 1-1/2-year low on Tuesday. July robusta rose $4, or 0.2 percent, to end at $1,622 a tonne.