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Sugar slips from 1-1/2 month high, coffee hits 3-week low

Mon June 17 2019

 

Raw sugar prices on ICE slipped on Monday as July options expired, after hitting a 1-1/2-month high on Friday while arabica coffee hit a three-week low.

 

SUGAR

July raw sugar settled down 0.09 cent or 0.7% at 12.66 cents per lb. Prices peaked at 12.77, just shy of the 1-1/2 month high of 12.78 hit on Friday.

 

July options expired on Monday, which helped keep a lid on the market, dealers said.

 

This was the contract’s first negative finish in a week, as the sugar market has been underpinned by soaring corn prices , which hit a five-year high on Monday amid rain and flooding in the U.S. Midwest.

 

Corn and sugarcane are both feedstocks for ethanol, so the reduced availability of corn could mean that more cane is used to make ethanol rather than the sweetener.

 

Meanwhile, Brazil’s Copersucar, the world’s largest sugar and ethanol merchant, said ethanol demand in the United States could increase by 50% when the new E15 policy is fully implemented.

 

Dry weather in India, a top sugar grower, had also been helping to support the market, dealers said. Farmers there are behind on planting some crops because of the delayed monsoon rains.

 

August white sugar settled down $1.90, or 0.6%, at $333.10 per tonne.

 

COFFEE

September arabica coffee settled up 0.2 cent, or 0.2%, at 98.25 cents per lb, after hitting a nearly three-week low of 97.05 cents.

 

The contract has closed lower in seven of the past ten sessions.

 

“(Coffee) is oversupplied and in very steep contango, which rewards sellers and means any short covering at this stage attracts new selling,” said Ole Hansen, head of commodity strategy at Saxo Bank.

 

September robusta coffee settled down $6, or 0.4%, at $1,386 per tonne.

 

COCOA

 

September New York cocoa settled down $17, or 0.7%, at $2,479 per tonne.

 

September London cocoa settled down 5 pounds, or 0.3% percent, at 1,840 pounds per tonne.

 

Prices had hit an 11-month high last week as top growers Ivory Coast and Ghana announced plans to set a floor price for cocoa.

 

Cocoa arrivals at ports in top grower Ivory Coast rose about 12% between Oct. 1 and June 16 from the same period last season.

 

Above average rains in most of Ivory Coast’s cocoa growing regions last week should boost the next main crop in autumn, while the April to September mid-crop is tailing off, farmers said.

 

Source: Reuters

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