Raw Sugar Falls as Decline in Bearish Bets Fails to Spur Rally

Sugar fell to the lowest level in almost a week in New York after prices failed to rally even as speculators reduced bets on lower prices. Cocoa slid.

Small and large speculators excluding index funds reduced bets on lower prices of raw sugar traded in New York by 62 percent in the week ended March 12, according to U.S. Commodity Futures Trading Commission data compiled by Bloomberg. Net-short positions were 30,175 contracts, down from 79,044 contracts in the previous 7-day period, the Washington-based commission said. Raw sugar futures climbed 0.7 percent last week.

“The interpretation of this news is bearish,” Arnaldo Luiz Correa, a director at Sao Paulo-based Archer Consulting, said in a report e-mailed March 16. “The market rose only 100 points despite the large volume of reduction in short positions.”

Raw sugar for May delivery fell 1.7 percent to 18.56 cents a pound by 6:56 a.m. on ICE Futures U.S. in New York, the lowest since March 12. White sugar for May delivery was down 1.1 percent to $533.30 a metric ton on NYSE Liffe in London.

Sugar prices failed to rally as prices that climbed to more than 19 cents a pound on March 15 attracted sales from producers, Lausanne, Switzerland-based researcher Kingsman SA, owned by the McGraw-Hill Cos., said in an e-mail today.

“The outlook is still mixed,” Tom McNeill, a director at Brisbane, Australia-based Green Pool Commodity Specialists Pty. said in a report e-mailed today. “Surplus worries are on-going, particularly as center south Brazil gets sugar production under way over the next month,” he said, adding that Thailand still has a lot of the sweetener to sell and that the premium that white sugar commands over the raw variety “appears attractive.”

The white sugar premium over the raw variety is $124 a ton, the highest since Oct. 9

Cocoa for May delivery fell 0.8 percent to $2,099 a ton in New York. Cocoa for delivery the same month dropped 0.6 percent to 1,418 pounds ($2,146) a ton in London.

Arabica coffee for delivery in May declined 0.3 percent to $1.3715 a pound on ICE. Robusta coffee for delivery in May was down 0.4 percent at $2,184 a ton on NYSE Liffe.

To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.

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