Sugar falls after 3 days of gains, cocoa at new lows

CoreCommodity Index falls to 2-1/2-month low

 Raw sugar futures fell for the first time in four sessions on Tuesday, giving back the
prior session's rally on pressure from earlier weakness in larger commodity markets, while cocoa slightly extended losses
to multi-week lows.
    Arabica coffee was little changed in choppy dealings.
    Raw sugar dropped as the Thomson Reuters CoreCommodiy Index  fell for the eighth straight session and reached a
2-1/2-month low.
    "Overall the commodity basket is weak and particularly energy is trending lower which adds weight to the sugar bears'
arguments," said Nick Penney, a senior trader with Sucden Financial Sugar. 
    October raw sugar settled down 0.37 cent, or 1.9 percent, at 19.52 cents per lb.
    "Perhaps the funds are unwinding in London, and with volumes relatively light it's resulting in a disproportionate effect on
the market's structure," Penney said.
    October white sugar settled down $9, or 1.7 percent,at $528.50 per tonne.
    Cocoa futures slightly extended losses, with the New York market inching down to the lowest in nearly four months while
London prices were at a four-week low, as expectations for ample output from main crops in West Africa later this year continued
to add pressure, traders said.
    September London cocoa settled down 5 pounds, or 0.2 percent, at 2,342 pounds per tonne, after tapping 2,335 pounds,
the lowest since June 30.
    "(London) cocoa futures will remain above the 2,000 pounds/tonne mark over second-half 2016 as extended British
pound weakness in the aftermath of the June 23 Brexit vote will provide a lasting support to prices while the market transitions
to the 2016-17 season at the start of fourth-quarter 2016," said BMI Research in a client note.
    September New York cocoa settled down $3, or 0.1 percent, at $2,851 per tonne, after falling to $2,841, matching
the session low reached on April 5. This formed a "double bottom" with the near-four-month low, which can be seen as
technical support.
    Arabica coffee futures were little changed and lacking direction as good harvest weather was forecast in top grower
Brazil and temperatures were expected to remain above frost levels through next week. 
    September arabica settled up 0.5 cent, or 0.4 percent, at $1.416 per lb. 
    The market shrugged off the possibility of a 24-hour strike by port workers in Brazil. 
    September robusta settled up $25, or 1.4 percent, at $1,811 per tonne.
    "The balance sheet looks tight for robusta globally in 2016-17," said Carlos Mera, senior commodity analyst with
Rabobank.
(Reuters)
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