Sugar futures fell back, amid continued upbeat talk over supplies spurred by Brazilian crush data, with coffee and grains down too.
Data released on Tuesday on sugar production in Brazil’s key Centre South region was seen as negative for prices.
Thomas Kujawa, co-head of softs at Sucden FInancial, noted a “full house” of bearish factors, with cane crushing, yield from cane, and the ratio of sugar to ethanol, all beating market expectation.
Mr Kujawa suggested that sellers would anticipate “a deluge of bearish news is on the horizon in the coming sessions as Brazil ‘cranks it up’.”
He also noted that technical investors “are pointing to a developing bear flag continuation pattern developing from the recent sideways action suggesting we shall go to new lower levels”.
The factors more than offset support from a stronger real, boosting the value in dollar terms of Brazilian assets, and some help from firmer energy markets too.
Meanwhile, cane giant Biosev was upbeat on sugar price prospects long term.
Strill, raw sugar for July was up 0.6% down at 12.00 cents a pound in late deals.
Ivory Coast murmers
Cocoa drew strength from a weaker dollar, as well as continued concerns of the key West African harvest.
The markets have absorbed the news that Ghanaian production will underperform earlier estimates, but now there are murmurs about the Ivory Coast crop, which some hoped would exceed the bumper 2014 harvest.
Jack Scoville of Price Futures noted “Ivory Coast port arrivals have been fading early this year, implying that production there has been overestimated”.
“Arrivals are now behind last year.”
Ivory Coast cocoa arrivals are now estimated at 1.482m tonnes, down more than 1% from 1.499m last year.
July New York cocoa was up 0.3% at $3117 a tonne in afternoon deals.
Robusta gains against arabica
In the coffee markets, robusta, traded in London, fared better than New York arabica futures.
A Brazilian government report released yesterday showed the coffee crop at 44.3m bags, down from last year, with robusta estimates below earlier forecasts.
“New York remains the weaker market right now as demand for arabica coffees does not appear to be very strong,” said Mr Scoville.
July robusta ended up 0.4% at $1,740 a tonne.
July arabica was down 0.9% to 136.10 cents a pound in closing deals.
China back in the lead
Also in New York cotton futures for July extended gains despite a US Department of Agriculture decision, in its monthly Wasde crop report, to stand by an estimate of 4.40m bales for domestic stocks at the close of 2014-15, and indeed for next season too.
There had been talk that a strong export pace would see the USDA lift its estimate for shipments and lower the stocks forecast.
Still, the USDA made an unexpected downgrade to its estimate for India’s 2014-15 cotton production, by 500,000 bales to 29.5m bales – enough, indeed to return to China undisputed leadership of world cotton output, at 30.0m bales.
The Indian revision was “based on arrivals at gins”, the USDA said.
New York cotton for July, which had shown marginal gains before the report stood up 0.7% at 64.97 cents a pound.
