Raw sugar futures on ICE turned lower and tapped a 2-1/2-month low on Friday, as the March contract's premium backed off a new peak and the drop triggered some chart-based selling. The sugar, coffee and cocoa markets all closed the week lower, extending losses from prior weeks amid expectations for abundant supplies.
March raw sugar settled down 0.11 cent, or 0.8 percent, at 13.66 cents per lb, the lowest since September 29. It closed the week down 2.8 percent, the spot contract's third straight weekly loss. The spot contract was on track to close 2017 down 30 percent, its biggest annual drop since 1998.
The March premium over May extended gains to the highest since May at 0.19 cent, but narrowed late in the session. Dealers said the widening premium combined with potential import demand from China was supportive earlier.
The market reacted to a combination of fundamentals, with the strength of the March/May spread encouraging the bulls in the market, as it indicated nearby physical demand, while the weak March futures price was seen responding to large global supplies, traders said. Chart-based selling was triggered after March fell below Tuesday's low of 13.7 cents, traders said.
March white sugar settled down $1, or 0.3 percent, at $360.50 per tonne, the lowest for the spot contract since October 2. March arabica coffee settled up 0.45 cent, or 0.4 percent, at $1.2075 per lb. It closed the week down 1.5 percent.
Dealers said a stronger Brazilian currency provided some mild support. March robusta coffee settled down $17, or 1 percent, at $1,723 per tonne.
On a weekly basis, the second-position contract was around 24 on the 14-day relative strength index, the lowest for since before the contract was revised in 2008. Favorable weather has allowed harvesting to make progress in top robusta producer Vietnam and a large crop is generally anticipated although the recent decline in prices has deterred farmer selling.
March London cocoa settled down 4 pounds, or 0.3 percent, at 1,407 pounds per tonne. Dealers said the weekly Commitment Of Traders report later on Friday will be closely watched to see if speculators increased a net short position, raising the possibility of a short-covering rally. March New York cocoa settled down $16, or 0.9 percent, at $1,877 per tonne.
Published under arrangements with Reuters.
No content from Business Recorder shall be reproduced, published, broadcast, rewritten for broadcast or publication, or redistributed directly or indirectly in any medium.
Business Recorder shall not be responsible or held liable for any error of fact, opinion or recommendation and also for any loss, financial or otherwise, resulting from business or trade or speculation conducted, or investments made, on the basis of the information posted here. Nor shall Business Recorder be held liable for any actions taken in consequence." >Copyright Reuters, 2017