Cocoa futures settled in negative territory, paring gains after hitting fresh contract lows.
"It's basically just the bearish sentiment that we're seeing in commodities," said Boyd Cruel, softs analyst for Vision Financial Markets in Chicago, adding that the softs complex was down in sympathy with a weak macro picture.
The 19-commodity Reuters-Jefferies CRB index fell to its lowest since November 2010.
Raw sugar futures dropped for the third straight day after closing below their 200-day moving average around 25 cents, basis March, on Thursday.
"We're having a macro (sell-off) again today," said Jack Scoville, senior analyst at The Price Group, referring to sugar and the rest of the soft-commodities sector.
The selling has seen open interest in raw sugar, which is normally an indicator of investor exposure in the market, fall to its lowest in almost five years.
"We can probably see some demand show up here," Scoville said.
ICE March raws tumbled 0.68 cent, or 2.7 percent, to settle at 24.13 cents a lb, the weakest closed since June 9 but up from the session low at 24.01 cents. For the week, the second position closed down 8.3 percent, its steepest fall since November.
The contract has lost more than 15 percent since the end of August.
Dealers said prices had been driven down on mounting recession fears, expectations for sluggish demand in the world's largest economies and a stronger US dollar that drove traders to liquidate commodities.
"The banking sector and the state of the world's economies are presently providing a bear macro backdrop to sugar," Thomas Kujawa at brokerage Sucden Financial said.
Dealers said there was also potential for the Brazil sugar crop to be revised higher.
December white sugar futures on Liffe fell $8.50, or 1.3 percent, to settle at $631.50 a tonne.
The spot arabica coffee futures contract trading on ICE fell to a six-week low. Added pressure came from a weak real, the currency in top grower Brazil that has fallen 17 percent this month, continuing to attract producer selling there, dealers said.
December arabica coffee futures on ICE tumbled 7.8 cents, or 3.3 percent, to settle at $2.3145 per lb, the weakest close since Jan. 25, after hitting a session low at $2.3080.
On the week, the spot contract tumbled 12 percent, its biggest weekly loss since March 2008.
Dealers eyed forecasts for rain in coffee-growing regions of Brazil, with new-crop flowering to get under way when the rainy season begins.
November robusta coffee on Liffe fell $75, or 3.7 percent, at $1,951 per tonne, the weakest close for the second position since Dec. 16.
SURPLUS COCOA
Cocoa futures on ICE extended their fall, hitting their lowest on the spot continuation chart in a year at $2,613 per tonne, and a lifetime low for the December contract. Liffe cocoa futures hit the lowest level since August 2009 at 1,815 pounds per tonne, a contract low for March futures.
ICE December cocoa closed down $46, or 1.7 percent, at $2,634 a tonne, while Liffe March cocoa dropped 40 pounds, or 2.2 percent, to finish at 1,766 pounds a tonne.
Copyright Reuters, 2011