Raw sugar steadies as rally fizzles; arabica hits one-month low

• Raw sugar was up 0.01 cent, or 0.1pc, at 12.47 cents per lb by 1204 GMT.
• Arabica coffee edged up after hitting a one-month low while robusta coffee recovered after matching Monday's nine-year lows.

LONDON: Raw sugar futures on ICE steadied on Wednesday, reversing Tuesday's losses, but with the market held back from extending last week's rally on account of producer and trade selling.

Arabica coffee edged up after hitting a one-month low while robusta coffee recovered after matching Monday's nine-year lows.

SUGAR

March raw sugar was up 0.01 cent, or 0.1pc, at 12.47 cents per lb by 1204 GMT.

Price rallied 10pc last week but have lost steam this week.

Sugar continues to get background support from fund short-covering and forecasts for a global deficit in 2019/20, but last week's rally has fizzled partly thanks to producer and trade selling, and excess stocks.

"The sugar market has clearly lost the impetus to rally.We think it has become clear that producers and traders are all too happy to sell into market strength," Commonwealth Bank of Australia said in a note.

December white sugar was up $3.6, or 1.1pc, at $345.20 a tonne.

COFFEE

December arabica coffee rose 0.5 cent, or 0.5pc, to 96.20 cents per lb, having hit a one month low of 95.40 cents.

Brazil's real currency recovered, helping push up arabica. A stronger real discourages Brazilian producer selling by reducing the price of dollar-denominated coffee in local currency terms.

Overall however, coffee remains under pressure from excess supplies following two seasons of surplus production.

"The general movement is sideways between 90 and 110.  Everyone's well aware the market is oversupplied... (but) below 90 it becomes difficult even for Brazilians to make money so the price levels out," said a dealer.

November robusta coffee was up $12, or 1pc, at $1,271 a tonne, having matched Monday's nine-year low of $1,250 earlier.

COCOA

December New York cocoa was down $2, or 0.1pc, at $2,446 a tonne, extending the market's retreat after a strong advance in September and early October.

Concerns about crop quality in top grower Ivory Coast are lingering due to rain, though there is a generally favourable outlook for production.

March London cocoa was down 15 pounds, or 0.8pc, at 1,875 pounds a tonne amid weakness in sterling.

Sterling erased earlier gains after the Northern Irish party that supports the British government said it would emphatically oppose a reported European Union concession on the Irish backstop under any Brexit deal.