Markets

Raw sugar slips as hedging picks up, arabica coffee at five-week low

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SUGAR

October raw sugar was down 0.17 cent, or 1.26 percent, at 13.35 cents per lb by 1358 GMT.

Prices made solid gains in the previous session, after more supportive chart signals lifted the market and triggered technical buying.

However, fund buying had mostly subsided by Tuesday amid softening technical signals, while a persistently bearish fundamental picture reinforced negative sentiment, dealers said.

The market was further pressured by an uptick in producer selling, as Brazilian producers continue to seek out higher prices to hedge their output.

"The problem is that the market is oversold and any run-up means it's better pricing for producers and trade houses," said one dealer. "So they're going to be selling, which is creating a bit of a cap on the market."

October white sugar slipped $2.70, or 0.73 percent, to $369.70 a tonne.

COFFEE

December arabica coffee slipped 1 cent, or 0.77 percent, to $1.2915 per lb, after hitting a session low of $1.2910, its weakest since July 13.

A negative close in the previous session hit the technical structure of the market, inspiring further speculative selling, dealers said.

The market has posted losses for six straight sessions, partly weighed down by an uptick in arbitrage selling by funds.

Currency also weighed on prices, as the dollar climbed before a central bank conference this week.

November robusta coffee rose $8, or 0.38 percent, to $2,127 per tonne.

India's coffee output will likely fall to its weakest in eight years in 2017/18, with low rainfall hitting the development of crops and encouraging the spread of plant-consuming pests, said a top industry body official.

COCOA

December New York cocoa eased $4, or 0.21 percent, to $1,888 a tonne, after hitting a session low of $1,867 per tonne.

December London cocoa rose 7 pounds, or 0.47 percent, to 1,502 pounds a tonne, supported by a weakening in the British pound.

Cocoa arrivals at ports in top grower Ivory Coast reached around 1,940,000 tonnes by Aug. 20 since the start of the season on Oct. 1, 2016, exporters estimated on Tuesday, up from 1,449,000 tonnes in the same period of last season.

 

Copyright Reuters, 2017