February 27, 2018 / 7:03 PM / 19 days ago

SOFTS-Raw sugar slumps to eight-month low, March/May spread narrows

 (Rewrites throughout; updates prices; adds comment, NEW YORK
    NEW YORK/LONDON, Feb 27 (Reuters) - Raw sugar futures on ICE
tumbled in heavy volume to an eight-month low on Tuesday, on
chart-based selling as the market breached key support levels
and on expectations for abundant supplies.
    The move sharply narrowed the March premium over May ahead
of the spot contract's expiry on Wednesday. 
    * May raw sugar        settled down 0.56 cent, or 4.2
percent, at 12.87 cents per lb after sinking to an eight-month
low for the second position of 12.84 cents.
    * Technically driven selling gathered pace as the market
broke below the February low of 13.20 cents and then last
month's low of 13.17 cents.
    * Expectations for a global 2017/18 surplus also weighed on
prices and speculators may be beginning to reestablish short
positions after scaling them back so far this month, traders
    * The tumble came ahead of the March contract's       
expiry on Wednesday and moved its premium over May SBH8-K8 to
0.11 cent, from Monday's high of 0.27 cent.
    * March open interest sat at 36,379 lots on Monday and a
heavy 25,388 lots traded on Tuesday, data showed.
    * A reasonably large delivery of around 1 million to 1.1
million tonnes was anticipated, dealers said, with one European
analyst expecting Brazil and Guatemala to be among the origins.
    * "The trade chat has been revolving around the explanation
of possible priorities for the coming Brazilian campaign to be
leaning more to ethanol over sugar production and so taking
sugar from the H18 tape (March futures) is viewed as strategic
in that contingency," said Thomas Kujawa, co-head of softs at
Sucden Financial.
    * India's sugar production is likely to rise to a record
29.2 million tonnes in the 2017/18 season, a survey showed.
    * May white sugar         settled down $8.90, or 2.5
percent, at $350.50 per tonne, after falling to $349.50, the
lowest since September 2015.  

    * May London cocoa         settled up 12 pounds, or 0.8
percent, at 1,576 pounds per tonne, after rising to a
three-month high at 1,582 pounds.  
    * May New York cocoa        settled up $12, or 0.5 percent,
at $2,227 per tonne, having reached a 13-month high at $2,234.
    * A diminished crop outlook in top grower Ivory Coast
supported prices, dealers said.
    * The International Cocoa Organization is expected to
publish its first forecast for the global balance in 2017/18 on
    * May arabica coffee        settled down 0.8 cent, or 0.66
percent, at $1.211 per lb. 
    * May robusta coffee         settled down $9, or 0.5
percent, at $1,735 per tonne. The March premium over May
LRCH8-K8 rose to a contract high at $49.

 (Reporting by Marcy Nicholson in New York and Nigel Hunt in
London, additional reporting by Chris Prentice in New York
Editing by Dale Hudson and Cynthia Osterman)
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