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Raw sugar, arabica fall as oil and Brazilian real weaken

Raw sugar, arabica fall as oil and Brazilian real weaken

Thu Jan 10 2019


Raw sugar futures on ICE fell on Thursday, pulling away from a multi-week peak set a day earlier as prices tracked energy markets lower, while the weaker Brazilian currency weighed on both sugar and arabica prices.




* March raw sugar settled down 0.2 cent, or 1.6 percent, at 12.67 cents per lb. It was the contract’s first negative finish in five sessions, coming a day after prices hit a five-week peak of 12.94 cents.


* Prices were pressured by weaker oil prices, dealers said.


* Weaker oil prices undermine the competitiveness of ethanol in top grower Brazil, stoking fears that mills will switch more of their output back to sugar from the biofuel.


* Prices were also weighed down by a weaker currency in Brazil, a top grower. A weaker currency can encourage producer selling by increasing local returns on dollar-traded commodities such as sugar and coffee.


* India is likely to export 2.5 million to 3.5 million tons of sugar in the 2018/19 marketing year that started on Oct. 1, five dealers and three industry officials told Reuters; far below the official 5 million-ton target.


* March white sugar settled down $3.60, or 1 percent, at $344.10 per ton.




* March arabica coffee settled down 1.05 cent, or 1 percent, at $1.0425 per lb., pressured by the weaker Brazilian currency.


* Prices hit a five-week high in the prior session.


* Top grower Brazil is expected to produce 53.4 million 60-kg bags of coffee in 2019, a 10.8 percent drop from the record 2018 crop, statistics agency IBGE said.


* Dealers were keeping a close eye on the weather in Brazil, where conditions in some coffee-growing regions are dry.


* March robusta coffee settled up $1, or 0.07 percent, at $1,536 per ton.


* Traders in Vietnam, the world’s top robusta grower, lowered their coffee output forecasts by 10 percent. They now expect 27 million 60 kg bags for 2018/19, compared with earlier forecasts of 30 million bags.




* March New York cocoa settled up $18, or 0.8 percent, at $2,369 per ton.


* May London cocoa settled up 1 pound, or 0.1 percent, at 1,739 pounds a ton.


* Cameroonian cocoa arrivals rose 11 percent by Nov. 16 from the start of the season in August, despite worsening violence in the country’s Anglophone regions.


* The chances of El Niño forming and continuing through the northern hemisphere spring 2019 were at about 65 percent, a US government weather forecaster said.


Source: Reuters

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