Raw sugar futures retreated on Tuesday from a one-month high hit the previous session, suffering its largest single-session losses in a week,as a rally in the real currency in top-grower Brazil stalled. Arabica coffee on ICE Futures U.S. was little-changed, while cocoa fell after failing to exceed a key psychological level.
A stronger real makes sales less attractive in local currency terms in Brazil, the world’s top producer of both sugarand coffee, which are denominated in U.S. dollars. The real began Tuesday by continuing its surge against the U.S. dollar, rising to its highest levels in more than a year, pushing sugar prices up with it.
But the sweetener then gave up most of its gains and turned negative once the real began retreating from its highs.
ICE October raw sugar settled down 0.16 cent, or 0.78 percent, at 20.39 cents per lb.
The move lower came after sugar tested one-month highs hit on Monday, amid concerns that weather issues and financial constraints could reduce investment by Brazilian producers.
“We’re still intact with the sugar bull,” said Nick Gentile, managing partner of commodity trading adviser NickJen Capital in New York. Prices have risen around 45 percent since April. October white sugar settled down $3.70, or 0.67 perent, at $549.40 per tonne. December arabica coffee settled down 0.05 cent, or 0.03 percent, at $1.4475 per lb.
Dealers noted Brazil’s coffee harvest was now well advanced with a large crop anticipated. Vietnam’s coffee supply is expected to tighten in coming weeks as farmers hold off on selling while some buyers switched to newly harvested robusta beans in Indonesia, traders said on Tuesday.
September robusta coffee settled down $6, or 0.33 percent, at $1,819 per tonne. December New York cocoa settled down $22, or 0.74 percent, at $2.953 per tonne. The losses came after cocoa once again tested the $3,000 per tonne level, a key psychological level, and failed to exceed it. “Upside momentum is slowing but the indicators remain bullish and a close toward $2,990 could see futures re-test $3,000 in the coming sessions,” Sucden Financial Research said in a daily technical report. London cocoa settled down 18 pounds, or 0.74 percent, at $2953 per tonne.