October 17, 2011 / 2:18 PM / 9 years ago

SOFTS-ICE sugar hits 1-month high, coffee falls

* Sugar trade concerned over Thai delays due to floods

* Arabicas market underpinned by tight global inventories

* West African crop outlook, firm dollar weigh on cocoa (Adds trade comment, updates prices)

By David Brough

LONDON, Oct 17 (Reuters) - ICE raw sugar futures touched a one-month peak on Monday supported by concerns over Thai floods, while coffee erased gains and cocoa fell on a stronger dollar and bleak sentiment about prospects to resolve the euro zone debt crisis.

Raw sugar futures touched a one-month high amid worries over delays in sugar deliveries from Thailand after extensive flooding in the world’s second-biggest exporter.

“ICE raw sugar futures have perked above decent technical levels,” said a senior London-based sugar futures broker.

“And concerns over delays in sugar leaving Thailand, rather than reduced crop size, are an overriding concern.”

Thomas Kujawa of brokerage Sucden Financial said, “It’s still too early to tell if there is damage to the cane crop (or potentially benefit should the flooding subside) but it’s still a story to spin for the sugar bulls at this stage.”

Sudakshina Unnikrishnan, an analyst with Barclays Capital, said: “The rebound (in sugar prices) has come about partly on the back of the floods in Thailand which add a bit of logistical delay for the sugar crushing there.”

ICE March raw sugar futures SBc1 rose 0.24 cent or 0.9 percent to 28.17 cents a lb at 1330 GMT, having earlier touched a one-month peak, basis front month, of 28.35 cents a lb.

Thailand’s worst flooding in five decades is expected to delay the 2011/12 cane-crushing season by a few weeks to late November, but crop damage is likely to be limited, senior industry officials said on Monday.

Speculators, or noncommercial investors, in raw sugar futures and options raised their long position to the highest level in four weeks last week, U.S. Commodity Futures Trading Commission’s latest data showed on Friday.

December white sugar futures on Liffe LSUc1 extended gains to stand up $5.30 or 0.8 percent to $716.60 a tonne in thin volume of 1,405 lots, having earlier touched a one-month high for the front month of $722.00 per tonne.

In robusta coffee and white sugar, speculators trimmed net long positions in NYSE Liffe futures in the week to Oct. 11, and they reduced a net short in cocoa, exchange data showed on Monday.


Arabica coffee futures erased gains after touching the highest levels in nearly three weeks and then fell, against a backdrop of the stronger dollar as Berlin voiced doubts over an imminent solution to the euro zone debt crisis.

The euro fell on Monday after the German Finance Minister said the upcoming European Union summit would not definitively solve the region’s debt crisis, denting investor optimism over the talks which had earlier pushed the currency to one-month highs.

December arabica coffee futures on ICE KCc1 were down 8.55 cent or 3.6 percent at $2.3100 per lb, having earlier touched $2.4355, the highest level for the front month since late September.

Coffee fields in parts of Brazil’s southeastern coffee belt are awash with white blossoms, boding well for the 2012 crop with the protection of wet weather to avoid losing flowers at this critical phase.

January robusta coffee on Liffe LRCc2 was down $73 or 3.6 percent at $1,958 per tonne in slim volume of 2,848 lots.

Cocoa futures on ICE fell, under pressure from the stronger dollar, the more pessimistic mood over the euro zone debt crisis, and prospects for ample West African supplies.

ICE December cocoa was down $51, or 1.9 percent, at $2,620 a tonne in modest volume of 3,814 lots.

London December cocoa was down 23 pounds or 1.4 percent to 1,683 pounds per tonne in light turnover of 2,925 lots.

Planned reforms to Ivory Coast’s cocoa sector will impose quarterly quotas on exporters’ purchases to prevent big players from using their dominant position to manipulate the market, according to the latest draft obtained by Reuters. (Reporting by David Brough; Additional reporting by Nigel Hunt; editing by Keiron Henderson)

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