NEW YORK/LONDON, June 26 (Reuters) – Sugar futures on ICE fell on Wednesday, pressured by expectations of a massive physical delivery against the July contract that expires later this week, while arabica futures slipped after earlier hitting a three-week high.
* July raw sugar settled down 0.3 cent, or 2.4%, at 12.03 cents per lb, after falling to a more than three-week low of 11.98.
* The market is focused on the expiry of the July contract later this week, with dealers expecting a massive delivery.
* Such a large delivery indicates plentiful supplies and sluggish demand, in turn weighing down the market, dealers said.
* “It seems two of our major global sugar trade houses are facing off in what looks a possible record delivery. There is potential for some quite ‘choppy action’ on the (front-to-second month spread) during the final run in,” said Thomas Kujawa, co-head of softs at Sucden Financial.
* The July contract’s discount to September <SBN9-V9> deepened to as much as -0.32 cent on Wednesday after being as narrow as -0.17 cent on Tuesday.
* Sugar production in Brazil’s main producing region in the first half of June remained below levels seen at this time in the previous season, cane industry group Unica said.
* August white sugar settled down $4.90, or 1.5%, at $319.20 per tonne.
* The members of French sugar cooperative Tereos backed the company’s existing strategy, electing a supervisory board that mostly supports management’s plans, although Chairman Francois Leroux lost his seat, the company said on Wednesday.
* September arabica coffee settled down 1.4 cent, or 1.3%, at $1.0605 per lb, after peaking at $1.0820, its highest since June 4.
* Prices have gotten some support this week from concerns about cold weather in Brazil, but plentiful global supplies continue to weigh down the market.
* Currency dynamics were also a factor, dealers said.
* “The market is adjusting to a weaker dollar and stronger real. (Brazilian) farmers are receiving less (for their coffee) and so are reluctant to sell, its nothing fundamental,” said Ricardo Santos, managing director of Riccoffee.
* September robusta coffee settled down $21, unicc or 1.4%, at $1,434 per tonne.
* September New York cocoa settled down $3, or 0.1%, at $2,461 per tonne.
* New York September cocoa looks neutral in a range of 2,445-$2,535 per tonne, and an escape could suggest a direction.
* Dealers are keeping a close watch on the weather in top producer Ivory Coast, where dryness is a concern.
* September London cocoa settled up 7 pounds, or 0.4%, at 1,827 pounds per tonne.
(Reporting by Ayenat Mersie in New York and Maytaal Angel in London; editing by Emelia Sithole-Matarise)