Cocoa futures on ICE fell to three-month lows on Tuesday, extending the prior session's steep tumble on speculative selling, while raw sugar rebounded from Monday's sharp decline. July New York cocoa settled down $62, or 2.6 percent, at $2,289 per tonne, after falling to a three-month low at $2,278.
Prices extended the prior session's losses on speculative buying, with automatic sell orders triggered below previous session lows, traders said. "I don't think you have seen wholesale (fund) long liquidation and that has been part of the problem. We've been drip-feeding all the way down," one dealer said.
Traders downplayed concerns about dry weather in top grower Ivory Coast. "The weather is slightly drier at the moment but I don't see a huge problem," one dealer said. Weeks of below-average rainfall in parts of Ivory Coast's main cocoa regions are raising concerns about the April-to-September mid-crop, farmers said on Monday.
July London cocoa settled down 54 pounds, or 3.2 percent, at 1,639 pounds per tonne after dipping to a three-month low of 1,632 pounds. July raw sugar settled up 0.12 cent, or 1 percent, at 12.02 cents per lb. The rebound came after Monday's steep drop to 11.86 cents. "I think it is just a small correction from yesterday when perhaps it (the fall) was overdone," one dealer said.
Dealers noted there was also some support from concerns about dry weather in Brazil and the continued sluggish pace of shipments from the world's top exporter following recent nationwide protests by truckers. India will consider building stockpiles of 3 million tonnes of sugar, Food Minister Ram Vilas Paswan said, to prop up local prices and help money-losing mills pay dues to millions of cane growers, a key voting bloc.
August white sugar settled up $6.30, or 1.9 percent, at $343.70 per tonne. July arabica coffee settled down 2.05 cents, or 1.7 percent, at $1.1945 per lb. The market was weighed partly by the weakness of Brazil's real currency, which made dollar-denominated prices more attractive in local currency terms in the world's top producer.
In Guatemala, a volcanic eruption that has killed at least 69 people is estimated to have cut the country's coffee production by 0.9 percent, coffee association ANACAFE said on its website on Monday. July robusta coffee settled up $2, or 0.1 percent, at $1,747 per tonne.