LONDON (Commodity Online): Agricultural commodities dropped further this week, unable to withstand the broad tide of selling that engulfed the market with a combination of a stronger dollar, bearish sentiment, risk reduction and ongoing concerns over the Eurozone debt situation pressuring the complex, said Barclays Capital in a briefing.

According to grains prices have dropped sharply, posting broad-based and widespread declines. While feed demand and US export sales remain weak, Ethanol production continues apace, especially after the recent slide in prices.

Indeed, the latest EIA data showed that US Ethanol production in the week ending 18 November totalled 917Kbpd, up 1Kbpd on the week.

 ICE Sugar prices this week fell to their weakest level in five and a half months. Prices have been weighed down by broad macro-economic concerns, but also fundamentals, with a market surplus and India this week giving the go-ahead for a million tonnes of sugar exports for 2011-12.

 Cotton was the poorest performing agricultural market (and amongst the weakest of all commodity markets) this week. Barclays has been forecasting prices to decline through H2 11 on the supply response and weaker demand amid elevated prices.

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