Markets subdued on global growth worries

 

Markets subdued on global growth worries

LONDON - Soft commodity markets were little changed on Tuesday after clawing back early losses due to worries about global economic growth and demand, and the stronger dollar.

By (Reuters)

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Published: Tue 19 Aug 2008, 6:54 PM

Last updated: Sun 5 Apr 2015, 11:55 AM

Sugar, coffee and cocoa futures slipped early as oil prices eased and the dollar rallied to a fresh six-month high against the euro.

Raw sugar futures drifted lower in the middle of a 13.0-14.0 cents a lb range.

'There's still plenty of physical sugar available for the next six weeks, so prices will likely work lower in the near term,' a dealer said.

Benchmark ICE October raw sugar futures fell 0.03 cent to 13.64 cents a lb at 1059 GMT.

London October white sugar futures were up 20 cents or 0.05 percent to $389.70 a tonne in thin volume of 256 lots.

Fundamentally, most market sources feel sugar prices are headed higher in the medium term due to a backdrop of tightening global supplies against rising consumption.

London cocoa futures eased with the wider commodities complex, running into light industry buying, dealers said.

Reports of favourable crop weather in West Africa clipped overall bullish sentiment in cocoa, but worries over bean quality in top growers Ivory Coast and Ghana lingered.

London December cocoa edged down 3 pounds or 0.2 percent to 1,450 pounds a tonne in low turnover of 1,532 lots at 1043 GMT.

ICE December was down $7 to $2,599 a tonne.

London's December contract had earlier broken through nearby resistance at 1,450 pounds to touch a session low of 1,447 pounds.

'We drifted lower (in cocoa) on the currency move (dollar rally),' a cocoa futures trader said.

The strengthening of the dollar and easing of oil prices dragged on coffee futures.

Dealers said they expected little hedging of robustas in the present inter-crop period before the start of the main Vietnamese harvest.

The fundamental market outlook for coffee appears sideways on expectations of ample supplies and steady demand, with benchmark robustas seen drifting near-term in a $2,200-2,300 range.

London November robusta coffee futures were down $14 or 0.6 percent to $2,244 a tonne in low volume of 1,840 lots at 1057 GMT.

Vietnamese coffee farmers may sell their remaining stock for the last time early next month to buy fertiliser to help ensure a good harvest, traders said.


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