Sugar resumes downtrend after one-day surge, cocoa turns up

Raw sugar futures on ICE neared a 6-1/2-month low on Friday, resuming their downtrend after a one-day rally as chart-based signals remained weak and expectations of a surplus weighed on prices. New York cocoa prices turned higher, along with the British pound against the US dollar, while the London market pared its losses. Robusta coffee prices jumped to a 3-1/2-week high.
March raw sugar futures settled down 0.34 cent, or 1.8 percent, at 18.22 cents per lb. This was not far above Thursday's low of 17.84 cents, its weakest since June 2 that was followed by a sharp rebound. "We still have a bearish bias in the short term despite the bounce. Last night's action did little to arrest sugar's weak momentum," analyst Tobin Gorey of Commonwealth Bank of Australia said.
Prices had been falling for more than two months on forecasts the global market could swing back into surplus in 2017/18 after two deficit seasons. "It was a poor week for sugar prices, in part due to a weakening of the Brazilian real, which could stimulate sugar exports," said Capital Economics in a note.
"The unwinding of the prior rally in sugar prices is also due to signs of a lower 2016/17 world sugar market deficit and expectations of a surplus in the next season." March white sugar futures settled down $5.80, or 1.2 percent, at $492.40 per tonne. Cocoa prices remained near multi-year lows. March New York cocoa settled down $4, or 0.2 percent, at $2,238 per tonne. The spot contract was on track to close 2016 down around 30 percent following four straight years higher as dealers focused on abundant supplies and lackluster demand.
March London cocoa settled down 5 pounds, or 0.3 percent, at 1,818 pounds per tonne. Robusta coffee futures rose on support from a slowdown in the harvest in top grower Vietnam, where torrential rains look set to curb exports in the short term and have led to quality concerns. March robusta settled up $27, or 1.3 percent, at $2,083 per tonne, after peaking at $2,090, the highest since late November. March arabica coffee settled up 0.25 cent, or 0.2 percent, at $1.4245 per lb. Colombia, the world's biggest grower of washed arabica, harvested more than 3 million bags in the first two months of 2016/17, the most for the period since 1998, the International Coffee Organisation said in its monthly newsletter.