Sugar sinks as Brazil harvest ramps up, London cocoa at 1977 peak

(Reuters) – Sugar futures on ICE  posted their biggest loss in two months on Thursday, pressured
by improved harvest conditions in top grower Brazil and  chart-based selling, while London cocoa inched up to the highest in nearly 40 years as the pound turned lower.
Robusta coffee hovered near a one-year high, underpinned by tight stocks, while arabica turned lower.
The mixed moves in soft commodities came as the 19-market Thomson Reuters CoreCommodity Index turned down
sharply to a five-week low and the U.S. dollar shifted higher.
“Across the board today we are seeing reversals and profit taking in many of the commodities,” said Peter Mooses, senior market strategist for RJO Futures in Chicago.
“We are seeing a sell-off in sugar due to profit-taking and an overbought market.”
October raw sugar settled down 0.84 cent, or 4.1 percent, at 19.73 cents per lb, the biggest one-day drop since
May 5.
Traders said the tumble was a technical correction, with sell-stops triggered around 19.85 cents, taking the spot
contract further from the 2012 high reached on Tuesday at 21.1 cents.
Also bearish was the dry weather in Brazil, helping harvest and ship loading, they said.
“The dry weather we’ve seen lately has improved operations a lot at the ports,” said Willian Hernandes, head of sugar
analysis at FG/Agro consultancy in Brazil.
The amount of sugar that ships were waiting to load at Brazil ports dropped to 1.24 million tonnes this week from 1.5
million tonnes last week. This was nearly half of the 2.3 million tonnes waiting to be loaded a month ago when rains had delayed operations.
October white sugar settled down $16.30, or 2.9 percent, at $543.60 per tonne, with traders turning their
attention to the expiry of the August contract on July 15.
Sterling-based London September cocoa settled up 23 pounds, or 0.92 percent, at 2,513 pounds per tonne, the highest since September 1977. This was the contract’s fifth straight rise as prices have been buoyed by weakness in the sterling after Britain voted to leave the European Union.
New York September cocoa settled up $30, or 1 percent, at $3,110 per tonne.
In coffee, September robusta futures settled up $13, or 0.7 percent, at $1,762 per tonne.
“Robusta stocks are really tight,” said Abah Ofon, lead analyst with the Global Coffee Monitor of Agrimoney.
September arabica coffee settled down 1.5 cent, or 1.1 percent, at $1.418 per lb.

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