Sugar futures fell more than 3 percent on Monday after a widely expected decision by India to approve a further 1 million tonnes of exports of the sweetener, but the rest of the softs complex dawdled due mainly to a dearth of leads. Cocoa futures crawled higher, while coffee futures traded mixed in modest dealings.
New York's May raw sugar contract tumbled 0.85 cent, or 3.3 percent, to close at 24.78 cents per lb. London May white sugar futures fell $10.90, or 1.65 percent, to settle at $648.80 per tonne. India has decided to allow an extra 1 million tonnes of unrestricted white sugar exports, a government source said, in line with industry expectations for the world's second-biggest producer of the sweetener.
"There was anticipation the Indians would (sell)," said Jack Scoville, analyst at The Price Group. The rest of the softs complex is probably "in a sideways trend." The contract had peaked at 26.20 cents on March 20, a three-week high for the front month, bolstered by concerns over the outlook for Brazilian production due to prolonged dry weather.
Speculators piled into raw sugar futures and options on ICE Futures US in the week to March 20, coinciding with the day sugar hit that three-week peak before a sell-off. "It is not out of the question that we could see a sharp drop in a session as a result of stops," said Nick Penney of broker Sucden Financial.
The state-run Thai Cane and Sugar Corp (TCSC) sold 79,333 tonnes of sugar from the next 2012/13 crop to international trading houses in a tender on Monday, a senior official said. Cocoa futures climbed as concerns over difficulties in sourcing quality beans from top producer Ivory Coast underpinned values.
May cocoa on ICE rose $24, or 1.04 percent, to close at $2,331 a tonne. London May cocoa added 31 pounds, or 2.07 percent, to finish at 1,513 pounds a tonne. Drew Geraghty, a commodity broker at ICAP North America in New Jersey, said short-covering was supporting cocoa. Speculators raised their net short position in cocoa futures and options by 1,990 lots to 21,336 lots in the week ended March 20.
Price differentials in the European cash cocoa market eased last week on ample supplies, but traders were concerned that crop prospects and lack of clarity on forward-sales auctions in Ivory Coast could tighten the market by the end of 2012. Flowers and pods on cocoa trees in some of Ivory Coast's main growing areas were drying up and dying after two weeks without rain, farmers said.
Coffee futures traded mixed The May arabica coffee contract rose 0.05 cent to end at $1.788 per lb. Benchmark Liffe May robusta coffee futures fell $18 to close at $2,015 a tonne.
Keith Flury, a senior soft commodities analyst with Rabobank, said coffee roasters appeared to be well stocked, and physical buying was subdued. Arabicas gained for the second straight day, although volume was light. The key May contract remained technically oversold on the 14-day relative strength index. Speculators continued to increase their net short position last week, when it rose to 20,544 lots, the biggest such position in arabica futures and options since such data became available in 2006.