SOFTS-ICE sugar extends losses due to abundant supplies

Wed Sep 19, 2012 6:24pm GMT
 

* Outlook for Q3 cocoa grind seen subdued

* Sugar trade focused on harvest weather in Brazil

* Arabica coffee supplies seen ample, analyst says (New throughout, updates prices; adds trade comment, second byline/dateline)

By Marcy Nicholson and David Brough

NEW YORK/LONDON, Sept 19 (Reuters) - ICE raw sugar futures made their biggest two-day tumble in three months on Wednesday, with dealers focused on a global surplus of the sweetener and on the progress of the harvest in Brazil, while a broad decline in commodity markets added to downward pressure.

Arabica coffee also fell as commodity markets extended this week's setback with the Thomson Reuters-Jefferies CRB index falling more than 1 percent to a two-week low as Brent crude oil prices slid to a six-week low.

ICE October raw sugar futures fell 0.48 cent, or 2.5 percent, to end at 18.96 cents per lb, drifting down towards a two-year low of 18.81 cents touched on Sept. 6. The move lower extends the previous session's losses, causing the contract to drop 5.3 percent in the past two days, the biggest two-day fall since June 22.

Dealers anticipate a large global sugar surplus, which is weighing on prices, and are focused on harvesting in Brazil and in the northern hemisphere.

"The weather in Brazil will be a key determinant to watch, to see whether or not production can catch up after a delay at the start of harvesting," Stefan Uhlenbrock, a senior analyst with F.O. Licht, said.   Continued...

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