SOFTS-NY cocoa slips to one-month low, sugar also weakens



© Reuters. SOFTS-NY cocoa slips to one-month low, sugar also weakens

LONDON, May 16 (Reuters) – New York cocoa futures fell to a one-month low on Wednesday, weighed by follow-through selling after the prior session’s sharp decline, while raw sugar prices also weakened.

COCOA

* July New York cocoa CCN8 fell $25 or 0.9 percent, to$2,649 a tonne by 1055 GMT after touching a one-month low for the contract of $2,646.

* The market saw its biggest one-day fall in six weeks on Tuesday, potentially signalling this year’s strong run-up in prices may have run out of steam.

* “It has not a surprise to see a bit of follow-through (selling). Technically, we are potentially vulnerable to some further decline,” one London dealer said.

* July LCCN8 fell 15 pounds, or 0.8 percent, to 1,855 pounds a tonne after dipping to a low of 1,844 pounds, the weakest for the contract since April 26.

* Dealers said a weaker pound helped to limit losses in London. GBP/

COFFEE

* July arabica coffee KCc2 rose 0.45 cents, or 0.4 percent, to $1.1740 per lb.

* Prices tumbled to their lowest in 3-1/2 weeks on Tuesday, after a sharp drop in the Brazilian real inspired renewed selling by growers and speculators, dealers said.

* “The funds have covered a very good chunk of their shorts recently, so now the technicals have broken back down and look negative,” one dealer said. “They are re-selling some of what they bought back.”

* Selling eased on Wednesday, with short-covering in light volume providing some support, although dealers said the market remained vulnerable to a further decline.

* July robusta coffee LRCc2 climbed $10, or 0.6 percent, to $1,738 a tonne, after falling to their weakest since April 17 a day earlier.

* Prices found some support on Wednesday as hedging by producers waned due to the low prices, dealers said.

* “The differentials have firmed and we’re not seeing much origin selling down here at these levels,” the dealer said.

SUGAR

* July raw sugar was down 0.07 cents, or 0.6 percent, at 11.45 cents per lb.

* Dealers said a stronger dollar had helped to stall the recent modest rebound in prices which had been driven partly by a switch of more use of cane for ethanol rather than sugar in both Brazil and Thailand.

* They noted October’s discount to March SB-2=R had narrowed to about 86 points from around 108 points a week ago.

* “The strength in the spread appears to reflect tighter availability of CS Brazilian raws around the October, with mills in the region looking to maximise their ethanol mix this season,” ING said in a market note.

* August white sugar rose $0.10, or 0.03 percent, to$322.50 a tonne.

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