Raw sugar prices slide, robusta coffee rebounds

Raw sugar futures were sharply lower on Tuesday with the market back on the defensive as a fund-fuelled short-covering rally ran out of steam. March raw sugar fell 0.36 cents, or 2.3 percent, to 15.03 cents per lb by 1536 GMT, retreating further from a six-month peak of 15.49 cents set on Friday and equalled on Monday. Dealers said the recent run-up, which was fuelled largely by fund short covering, had petered out.
"We have evidence the funds have covered a short and that jobbers predicting that activity are taking profit," said Sucden Financial senior trader Nick Penney. Dealers noted a breach of resistance around the double top at 15.49 cents would be needed if the market were to regain its upward momentum. March white sugar fell by $4.70, or 1.2 percent, to $390.20 a tonne.
January robusta coffee was up $22, or 1.3 percent, at $1,742 a tonne, rebounding from an earlier low of $1,699, the weakest for the second position since June 2016. Dealers said expectations of a large crop in Vietnam, where the harvest began last month, and an improving outlook for next year's Brazilian crop could limit the scope for any rally. Trade house Sucden said on Monday Brazil will harvest around 60 to 62 million bags of coffee in 2018/19, up from this season's 50.6 million.
"Previously, a number of observers had given up any hope of such a large crop after an excessive period of insufficient rainfall. This is grist to the mill of the bears on the coffee market," Commerzbank said in market note. March arabica coffee rose 0.95 cents, or 0.7 percent, to $1.2915 per lb.
March London cocoa fell by 6 pounds, or 0.4 percent, to 1,535 pounds a tonne after dipping to a low of 1,519 pounds, the weakest for the second month since Oct. 2. Dealers said the market was weighed down partly by favourable weather in top grower Ivory Coast.
Above average rainfall and lengthy sunny spells in most of Ivory Coast's cocoa regions last week could provide perfect conditions for crop development early next year, farmers said on Monday. March New York cocoa was down $2, or 0.1 percent, at $2,065 a tonne.