February 28, 2020 / 12:18 PM / a month ago

SOFTS-Raw sugar slumps to 7-week low as commodity markets tumble

LONDON, Feb 28 (Reuters) - Raw sugar prices on ICE fell to a seven-week low on Friday while coffee and cocoa also slid as concern about the spread of the coronavirus sparked widespread losses in crude oil and other commodity markets.

SUGAR

* May raw sugar was down 0.20 cents, or 1.4%, at 14.00 cents per lb by 1200 GMT after sliding to a seven-week low of 13.88 cents.

* Dealers noted the recent sharp decline in crude oil prices could also encouraged mills in Brazil to switch to use more cane to produce sugar rather than biofuel ethanol.

* “Lower oil prices are lowering prospective ethanol parity. The New York May (raws contract) has now fallen enough that it is in danger of triggering momentum investors to sell their heavy long position,” Commonwealth Bank of Australia analyst Tobin Gorey said.

* CFTC data to be issued later on Friday should show the extent to which hedge funds and other money managers have been scaling back a large net long position although it only covers the period up to Feb. 25. * Dealers said the expiry of the March contract later on Friday was also providing a major short-term focus.

* The open interest on the March contract has been falling steadily in the run-up to expiry and stood at 29,446 lots as of Feb. 26, down 13,425 lots from a day earlier.

* May white sugar fell $5.10, or 1.3%, to $393.60 a tonne, having hit a one-month low of $392.10.

COCOA

* May New York cocoa was down $46, or 1.7%, at $2,699 a tonne after setting a six-week low of $2,698.

* The May contract may fall to $2,683 per tonne, as it has broken a support at $2,754, Reuters technical analyst Wang Tao said.

* May London cocoa fell 28 pounds, or 1.4%, to 1,959 pounds a tonne.

* Multinational cocoa exporters operating in Ivory Coast have agreed to sell their domestic counterparts 60,000 of the 150,000 tonnes the Ivorian companies say they need to avoid default, three sources involved in the talks said on Thursday.

COFFEE

* May arabica coffee fell 0.25 cent, or 0.2%, to $1.0950 per lb.

* May robusta coffee was down $3, or 0.2%, at $1,286 per tonne. (Reporting by Nigel Hunt; Editing by Steve Orlofsky)

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