Sugar and coffee futures sold off Thursday as turmoil in Brazilian markets pushed down the value of the real.
Brazil is the largest producer of coffee and sweetener in the world. When the Brazilian real loses ground against the dollar, it encourages sales of dollar-denominated goods so producers can recoup more of their local currency from sales.
Raw sugar for July lost 1.7% to end at 16.03 cents a pound, and arabica coffee for July fell 3.5% to settle at $1.2965 a pound on the ICE Futures U.S. exchange.
According to data from FactSet, the real had fallen as much as 7.21%, making it the largest intraday drop since Oct. 8, 2008, when it dropped as much as 7.80%.
"The main trigger seems to have been concerns of the political situation in Brazil, where new corruption claims have arisen and this time potentially implicating President [Michel] Temer over 'hush money' claims," Agrilion Commodity Advisers said.
A seasonal pattern in coffee this time of year helped boost futures Wednesday, along with a weakening dollar. May is known for rallies over frost concerns in Brazil and the potential for heavy rains.
In other markets, July cocoa rose 1.5% to end at $2,084 a ton, frozen concentrated orange juice for July lost 0.6% to settle at $1.411 a pound, and July cotton was off 1.2% to end at 79.24 cents a pound.
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(END) Dow Jones Newswires
May 18, 2017 17:15 ET (21:15 GMT)