The October contract, which expires on Friday, settled down 1 percent at 13.08 cents. Open interest fell by 17,636 lots to 41,275 lots as of Tuesday. Its discount to March widened to as much as 0.77 cent from 0.65 cent on Monday, hinting at a lack of immediate demand, traders said.
"It seems Oct NY expiry may be a large one and, as usual, homes will have to be found for the raws at a time when refiners margins are being cut by the low whites premium," said Nick Penney, senior trader at Sucden Financial, in a daily note. Above normal rainfall is forecast in Brazil's main center-south region in the next six to 10 days, said Maryland-based meteorologist MDA Information Systems in a note.
December white sugar settled up 60 cents, or 0.2 percent, at $356.20 per tonne, after hitting $353.30, its weakest since September 2015. Pressure came from persistent fund and European producer selling as quotas are removed from Oct. 1. "The market is primarily being beaten up by the amount of hedging that's going into it," said one dealer.
December arabica coffee closed down 2.9 cent, or 2.2 percent, at $1.2935 per lb, the lowest settlement since Sept. 8. Dealers pointed to speculative selling as the market waited to see if forecasts for crop-friendly rains in Brazil would materialize. Demand from roasters was sluggish amid ample nearby supplies, dealers said.
They said a weaker Brazilian real versus the dollar also weighed. A decline in the real encourages producers to sell more coffee by increasing their returns in local currency. November robusta coffee settled down $49, or 2.5 percent, at $1,950 per tonne.
December New York cocoa settled up $44, or 2.2 percent, at $2,015 per tonne. December London cocoa settled up 25 pounds, or 1.7 percent, at 1,498 pounds per tonne. Ivory Coast is expected to set the minimum price paid to farmers between 750 and 800 CFA francs ($1.38-$1.47) per kilogram for the 2017/18 main crop, sources said.
Copyright Reuters, 2017