Markets

Raw sugar tumbles as chart signals sour, arabica off highs

Published Updated

SUGAR

October raw sugar was down 0.35 cent, or 2.37 percent, at 14.44 cents per lb by 1435 GMT, after tumbling almost 6 percent to a low of 13.92 cents.

Dealers said a sizeable sell-stop was triggered when prices dipped below the 10-day moving average, prompting a wave of technical selling by speculators and funds.

The market climbed up earlier in the week as more upbeat commodity markets and a better outlook for ethanol in Brazil boosted sentiment. However, fund short-covering waned, sapping momentum and souring the technical structure, dealers said.

"There is no real fundamental reason for the market to be up at 15 cents," said one dealer. "As it goes below the 10-day moving average, it's unlikely the shorts will start stopping themselves out. And producers are also probably saying, 'let's at least get some pricing done'."

October white sugar fell $6.10, or 1.54 percent, to $391.00 a tonne, tracking losses in the raws market.

COFFEE

September arabica coffee slipped 0.65 cent, or 0.46 percent, to $1.397 per lb, reversing course after hitting a 3-1/2 month high of $1.4155.

Dealers said recent gains have improved the technical structure, but a firmer dollar and a softening in broader commodity markets halted the advance.

September robusta coffee also dipped $11, or 0.51 percent, to $2,134 per tonne, with dealers noting physical demand remains sluggish.

"I don't feel like there's huge demand at the moment, for robusta especially," said one dealer. "And there are a lot of roasters buying low quality arabica rather than paying more money for robusta."

Coffee stocks held in European ports rose 2.5 percent in May, preliminary figures from the European Coffee Federation (ECF) showed on Thursday.

COCOA

September New York cocoa was down $6 or 0.29 percent, at $2,049 a tonne.

September London cocoa was up 7 pounds, or 0.44 percent, at 1,587 pounds, after hitting a high of 1,604 pounds.

Dealers noted prices were tracking broader market moves but traded volumes remained thin.

"The commodity sector is driving the price more than anything else," said one dealer.

 

 

Copyright Reuters, 2017