Raw sugar futures extended steep losses to a 3-1/2-month low on Thursday, falling into technically oversold territory as expectations for ample global supplies kept the pressure on prices, while New York cocoa fell from a six-week high. March raw sugar settled down 0.34 cent, or 2.5 percent, at 13.08 cents per lb, after falling to 13.02 cents, its weakest since Sept. 27.
This took the spot contract to around 25 on the 14-day relative strength index, the mostt oversold level since June. Prices have dropped more than 14 percent in the past 10 sessions after reaching a five-week high on Jan. 3 amid surging open interest.
Total open interest jumped by nearly 22,000 contracts to 845,579 contracts on Wednesday, ICE data showed. Dealers said worries about a global supply glut pressured prices amid expectations for strong output from the likes of Thailand, the EU, Pakistan and India.
"The lack of a major buyer stepping up to absorb some of the surplus is also weighing on the market," Nick Penney, senior trader at Sucden Financial, said in a note. March white sugar settled down $7.80, or 2.2 percent, at $353.10 per tonne, after dropping to $352.80, the lowest since September 2015.
March New York cocoa settled down $1, or 0.05 percent, at $1,984 per tonne, after rising to $2,011, the highest since Dec. 4.
The contract turned lower after failing to hold above the 50- and 200-day moving averages. This hesitation at the highs followed last week's technical formation of a so-called death cross, when the 200-day moving average crossed above the 50-day moving average. This can be associated with a downward market trend. March London cocoa settled down 14 pounds, or 1 percent, at 1,403 pounds per tonne.
No. 2 cocoa grower Ghana is considering cutting the price it pays its farmers, government sources said. Dealers awaited fourth-quarter 2017 North American grind data, due at 4 p.m. EST (2100 GMT), with expectations for a rise of 1 to 3 percent.
Asian grinding, postponed from a scheduled Thursday release, was estimated to have risen 5 to 10 percent, dealers said. March arabica coffee settled down 2 cents, or 1.6 percent, at $1.211 per lb.
Sentiment was dampened by signs of surging production in top grower Brazil, which is poised to harvest its largest ever coffee crop this year. March robusta coffee settled up $24, or 1.4 percent, at $1,793 per tonne.
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