Raw sugar and arabica coffee futures finished lower Tuesday as uncertainty over the debt crisis in the US and Europe hounded both markets in modest volume. Cocoa edged up to a firmer finish. Thomson Reuters data showed volume running from a fifth to nearly 40 percent below the 30-day average.
Key October sugar futures shed 0.16 cent to close at 28.78 cents per lb. Investor sales nudge raws lower, said dealers. Market players mull possible solution to eurozone debt crisis at a summit on Thursday and prospect of a debt default by the United States.
Country Hedging Inc senior analyst Sterling Smith said softs complex looking at a "muddled" outlook which is causing markets to drift. Sugar deriving some support from news of reduction in the estimated cane crush of No 1 producer Brazil to 533.5 million tonnes, and the trade belief it could drop below 530 million.
September arabica coffee futures fell 4.35 cents to close at $2.4385 per lb.
It was the lowest settlement for the second position arabica coffee contract since Jan. 27, according to Thomson Reuters data. Macro issues in the US and Europe keeps coffee on the defensive.
Smith said arabicas seem to be "grappling" for a bottom at this time. Market trading at its lowest level since late June, preliminary Thomson Reuters data showed. Forecaster Telvent DTN said Brazil coffee areas not threatened by a cold spell.
Key September cocoa futures rose $5 to end at $3,164 per tonne. Bean values edge up on investor buying, said traders. Cocoa trading at $3,175 area seen overbought. "We are ripe for a pullback," said Smith. Market largely engaged in technical business while waiting for resolution of US and European debt crisis. Less favourable weather in West Africa and a return to the long-term decline in Ivory Coast production are expected to switch the global cocoa market into deficit in 2011/12, a Reuters poll showed on Monday.