Raw sugar futures climbed off an eight-month low on Wednesday as the market focused on the expiry of the March contract later in the day, while New York cocoa retreated from the prior session's 13-month high. May raw sugar was up 0.36 cent, or 2.8 percent, at 13.23 cents per lb at 1440 GMT after earlier dipping to an eight-month low of 12.82 cents.
Dealers said the market continued to see sporadic short- covering rallies but the overall trend remained bearish due to more than ample supplies. "The fundamentals have been weak for so long now and getting more bearish at each upward estimate of India, Thailand and EU output," said Sucden Financial senior trader Nick Penney in a market note.
Dealers said the prospect of producer selling would make it difficult for the market to sustain a recovery in prices. They noted less than one million tonnes of sugar was now expected to be tendered against the March contract after a sharp drop in the open interest.
May white sugar rose $6.80, or 1.9 percent, to $357.30 a tonne. The front month had slid to a low of $349.50 on Tuesday, its weakest since September 2015. May London cocoa was down 13 pounds, or 0.8 percent, at 1,563 pounds a tonne, retreating from the prior session's three-month high of 1,582 pounds.
Dealers said the market remained underpinned by concerns that hot, dry weather could curb production in Ivory Coast although rains last week brought some respite. The market was keenly awaiting the International Cocoa Organization's first forecast of the global balance in 2017/18, which is expected to be issued later on Wednesday.
May New York cocoa fell $41, or 1.8 percent, to $2,186 a tonne after climbing to a 13-month peak of $2,234 on Tuesday. May robusta coffee fell $13, or 0.75 percent, to $1,722 a tonne with the strong pace of exports from top robusta producer Vietnam keeping the market on the defensive.
Coffee exports from Vietnam will rise an estimated 17.6 percent in January-February from a year ago to 336,000 tonnes, equal to 5.6 million 60-kg bags, the General Statistics Office said in a report on Wednesday. May arabica coffee rose 0.30 cent, or 0.25 percent, at $1.2145 per lb.