July 13, 2016 / 6:37 PM / 4 years ago

SOFTS-Cocoa prices rise on tightening supplies, sugar at 2-week low

* London cocoa sees nearby premiums strengthen
    * New York cocoa filling chart gap opened after Brexit vote
    * Spot white sugar spread slumps to huge discount

 (Rewrites throughout, updates prices; adds comment, second
byline, NEW YORK dateline)
    By Marcy Nicholson and Nigel Hunt
    NEW YORK/LONDON, July 13 (Reuters) - Cocoa futures rose on
Wednesday, with the London July/September spread rallying for
the fourth straight day to a contract high, underpinned by
tightening supplies following a poor mid-crop in top grower
Ivory Coast.
    Raw sugar futures fell to a two-week low, changing direction
on late-day selling, after being supported by forecasts for cold
weather in top grower Brazil, which also helped lift coffee
prices, traders said.
    September London cocoa settled up 23 pounds, or 0.9
percent, at 2,491 pounds per tonne. 
    The July contract, which expires on Thursday, rose
to a premium of as much as 86 pounds over September, the highest
for the spread LCCN6-U6.
    Dealers said this reflected the tightening supply outlook
exacerbated by the prospect of a slow start to the main crop
later this year.
    "The ongoing dry weather and potential slow start to the new
crop is reflected in the strong spreads, especially what is
going on in July/Sep," a London dealer said.
    September New York cocoa settled up $29, or 0.9
percent, at $3,143 per tonne as it continued to fill a chart gap
created when the market opened sharply lower on June 24.
    "We delved into the gap which was created on the day after
the (EU) referendum. It is on a mission now to fill that gap,"
the London dealer said.
    Dealers said second-quarter North American grind data on
Thursday would also provide a short-term focus. Dealers are
estimating a 5 percent rise, which would mark the first
year-over-year gain in seven quarters.
    Raw sugar futures turned lower in the final 20 minutes of
trade as late-day selling came into the market.
    "Just the mention of cold has an element of upside to it.
Seems like no threat at this time though," said one U.S. trader
about the reason behind the market's earlier strength.
    October raw sugar on ICE settled down 0.24 cent, or
1.2 percent, at 19.48 cents per lb after falling to a two-week
low at 19.37 cents.
    October white sugar settled down $5.40, or 1
percent, at $538.80 per tonne.
    The August contract, which expires on Friday, fell
to a discount as large as $10 to October. This was in sharp
contrast to its $1.80 premium on Wednesday.
    Dealers said this indicated little appetite to take
delivery.
    September arabica settled up 0.25 cent, or 0.2
percent, at $1.4765 per lb and September robusta settled
up $7, or 0.4 percent, at $1,816 per tonne.

 (Editing by Dale Hudson and Chizu Nomiyama)
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