Sugar slides to two-month low, cocoa rises

Raw sugar futures fell sharply to a two-month low on Wednesday, pressured by bearish options dealings and heavy chart-based selling while the market digested a large delivery against the whites contract. Cocoa futures turned higher, with the London market bouncing from a 9-1/2-month low as top grower Ivory Coast said it would allow cocoa exporters to roll over last season's unexecuted export contracts into the 2016-17 season.
Coffee futures were mixed. March raw sugar settled down 0.79 cent, or 3.7 percent, at 20.36 cents per lb, its biggest one-day drop since July. The contract slumped to a two-month low of 20.31 cents. "The market remains technically under pressure. Earlier today we saw 3,280 (lots of) January 19.50 puts trade," a US trader said, adding that the options trade was interpreted by the market as bearish.
The spot contract was on track for its sixth straight week of declines and was nearing technically oversold levels on the 14-day relative strength index. It was down 15 percent from the October 6 peak of 23.9 cents, the highest in more than four years. Data showed that sugar production in center-south Brazil in the second half of October was in line with some estimates. But others viewed it as slightly higher than expected, contributing to the bearish mood.
"We had slightly bearish Unica data with sugar production slightly higher than expected," Rabobank analyst Carlos Mera said, adding that other factors included the recent weakness of Brazil's real currency. "It seems like a good time for profit-taking." Tuesday's expiry of the December white sugar contract saw the largest delivery in more than nine years with 535,850 tonnes tendered, exchange data showed on Wednesday.
March white sugar settled down $13.50, or 2.4 percent, at $541.20 per tonne. New York cocoa futures rose as the market began to find support after falling to a 3-year low on Tuesday. March New York cocoa settled up $16, or 0.7 percent, at $2,411 per tonne, remaining in technically oversold territory on the relative strength index.
March London cocoa settled up 10 pounds, or 0.5 percent, at 2,002 pounds per tonne. Coffee futures were mixed with March Arabica finishing down 0.9 cent, or 0.5 percent, at $1.644 per lb. January robusta settled up $27, or 1.3 percent, at $2,163 per tonne.