(Reuters) – Raw sugar futures on ICE extended losses on Thursday after Brazilian cane data showed a higher than expected rate of crushing, while coffee and cocoa prices dropped under pressure from weaker financial and commodity markets.
Sugar futures were weighed down by higher-than-expected late season sugar output in Brazil, which will add to available supplies longer term.
Late season output from Brazil’s main center-south cane belt jumped unexpectedly to 97,000 tonnes in the second half of January, after dropping to 29,000 tonnes in the first half of last month, milling association Unica said.
One broker said some cash-strapped Brazilian mills had pressed on with the crush during the traditional inter-crop period, and that the next cane harvest could start early.
ICE March raw sugar futures settled down 0.31 cent, or 2.3 percent, at 13.07 cents per lb, remaining well within their two-week range after bouncing up from a four-month low.
“The smoking gun for the recent shrink in range and lack of direction in the last few sessions seems to be a combination of the poor macro environment coupled with analysts upping their expectations of the coming Brazilian cane harvest,” Tom Kujawa, co-head of softs at Sucden Financial Sugar, said.
May white sugar settled down $10.50, or 2.7 percent, at $380.70 per tonne.
A moderate delivery tonnage comprising Central American and possibly other origins including India is expected at Friday’s expiry of the March white sugar futures contract on ICE Futures Europe.
Coffee dropped, with the spot contract returning toward a two-year low reached in January, as prices gravitated to $1.10, a level with the highest open interest in March puts. March options expired at the end of the session.
ICE May arabica settled down 1.85 cent, or 1.6 percent, at $1.15 per lb.
March robusta coffee settled down $10, or 0.7 percent, at $1,382 per tonne.
One broker said that robusta futures will need to rally by $100-$150 per tonne to attract Vietnamese selling, though it was thin this week because of the Tet holiday in the world’s biggest robusta grower.
Soft commodities were pressured by the weak tone in larger markets, despite the weak U.S. dollar, as the 19-commodity Thomson Reuters CoreCommodity Index fell for the sixth straight day.
May New York cocoa futures settled down $54, or 1.9 percent, at $2,800 per tonne, while March London cocoa settled down 34 pounds, or 1.66 percent, at 2,012 pounds per tonne.