The market pulled back on Thursday, with dealers pointing to waning speculative buying interest against a backdrop of weaker oil prices. Weaker energy prices undermine the competitiveness of ethanol in Brazil, bolstering worries that mills in the top grower might switch more production back to sugar rather than the biofuel.
"The ethanol parity will remain very important throughout the (2019/20) season," said Carlos Mera, senior commodity analyst at Rabobank. A weaker Brazilian currency also weighed on prices, dealers said. A weaker real encourages producer selling by boosting local returns on dollar-traded commodities.
March white sugar settled down $5.30, or 1.5 percent, at $348.5 per tonne. Brazil's center-south region will produce 30.2 million tonnes of sugar in the 2019/20 season, about 14 percent more than it did in the previous crop, INTL FCStone said. March arabica coffee remained unchanged from the previous session at $1.024 per lb.
March robusta coffee settled down $4, or 0.3 percent, at $1,535 per tonne. Brazil's 2019 coffee crop, an off year in the production cycle, is seen at between 50.48 million bags and 54.48 million bags, the government said Thursday. May New York cocoa settled up $14, or 0.6 percent, to $2,369 a tonne.
Market participants were awaiting North American fourth-quarter grind data, due after the market close, for demand signals. Expectations range are for a year-on-year gain from 1 percent to 4.9 percent. Data this week showed European grindings rose 1.6 percent in the fourth quarter from the same period in 2017. May London cocoa settled down 4 pounds, or 0.2 percent, at 1,701 pounds a tonne.