(Reuters) – Raw sugar futures on ICE sank on Thursday in a sharp turnaround that yanked prices down more than 1 cent below a 1-1/2-year high as heavy speculative selling triggered automatic sell orders, traders said.
Cocoa prices extended losses below 2016 highs while the benchmark robusta coffee soared above a 200-day moving average for the first time to a six-month high.
ICE July raw sugar settled down 0.81 cent, or 4.9 percent, at 15.84 cents per lb. Earlier, prices climbed to 16.87 cents, the highest for the spot contract since October 2014, but then tumbled as low as 15.72 cents, with traders noting sell stops were triggered.
“The specs were pushing the market higher, and it appears to have been computerized funds trading intraday. Some of them are exiting now,” said a European analyst.
“A rally from 14 cents was warranted, but no big buyers were really chasing the market higher. We were bound to correct.”
Nearly 6,200 lots of July traded in just two minutes when prices slumped below 16.07 cents, with another burst of volume as prices fell to their lows around the settlement window.
“It seems as if the ‘concerns’ that the non-index fund net long may well have now set a new record … may have come to bear in the form of profit talking (with) further trailing sell stops being triggered on the way down exacerbating the correction,” said Agrilion Commodity Advisers in a note.
Prices had risen earlier on concerns over tight supplies in top consumer India and a stronger Brazilian currency .
August white sugar followed the raws and settled down $15.60, or 3.3 percent, at $461.20 per tonne, after rising to $481.50, the highest since June 2014.
Robusta coffee hit a six-month high, surging above the 200-day moving average at $1,588 for the contract’s first time, basis July.
July robusta coffee settled up $32, or 2 percent, at $1,617 per tonne, after touching $1,625, the highest since November on a continuation chart.
July arabica coffee settled up 1.8 cent, or 1.5 percent, at $1.215 per lb, bouncing up from Wednesday’s two-month low.
Cocoa futures consolidated lower after a run to 2016 highs last week on profit taking, dealers said.
London July cocoa settled down 20 pounds, or 0.9 percent, at 2,287 pounds per tonne.
July New York cocoa settled down $28, or 0.9 percent, at $3,158 per tonne