Markets

Raw sugar hovers near 10-month low, cocoa weakens

Published March 31, 2017 Updated March 31, 2017 03:38pm

SUGAR

May raw sugar was down a modest 0.03 cent, or 0.18 percent, at 16.78 cents a lb by 1419 GMT.

Futures fell sharply in the previous session to a fresh 10-month low of 16.58 on chart-based selling.

Volumes were low on Friday and dealers said a further sharp sell-off was unlikely given the month and the quarter were coming to a close.

However, amid mostly negative technical signals, dealers noted support was fragile and any rally off the lows could trigger a fresh round of selling.

"The trend continues lower despite the markets being oversold," said Nick Penney, senior trader at Sucden Financial. "We anticipate a move down to 16 cents in the absence of any bullish weather or fundamental news to shake the shorts out of their comfort zone."

With a surplus in the 2017/2018 season now largely expected, the focus is on weather in Brazil's Centre-South cane region and the possibility of an El Nino developing in time to affect India's crop-friendly monsoon.

The market was also monitoring top consumer India, which is expected to make a decision on whether to cut import tariffs in a bid to offset lower production this season.

"That's really only going to affect the July (contract) onward," said one dealer. "But what it might do is put a little bit of a floor on the market."

May white sugar also fell $3.5, or 0.73 percent, to $475.50 a tonne, but remained above the 10-month lows touched on Thursday.

COCOA

May London cocoa was down 8 pounds, or 0.48 percent, at 1,675 pounds a tonne and May New York cocoa down $12, or 0.57 percent, at $2,084 a tonne.

The market has been weighed this week, after a rally driven by speculators rushing to cover a large net short position ran out of steam.

Cocoa prices recently touched multi-year lows amid worries about oversupply.

COFFEE

May arabica coffee fell 0.50 cent, or 0.35 percent, to $1.412 per lb, although trade remained largely range-bound.

May robusta also fell $10, or 0.46 percent, to $2,151 a tonne.

The market was monitoring weather in Brazil amid forecasts for some light crop-friendly rains in coffee regions that have been plagued by dry conditions recently.

 

 

Copyright Reuters, 2017