February 5, 2018 / 6:59 PM / in 19 days

SOFTS-Raw sugar shifts higher as March/May spread rallies

(Recasts throughout, updates prices, adds comment, ICE data; NEW YORK dateline)

NEW YORK/LONDON, Feb 5 (Reuters) - Raw sugar futures on ICE turned sharply higher on Monday, buoyed by a rally in the March/May spread amid talk of nearby demand, while cocoa markets came off two-month highs reached earlier in the session.

SUGAR

* March raw sugar settled up 0.27 cent, or 2 percent, at 13.9 cents per lb, changing direction after falling to 13.28 cents.

* Traders said the rally was triggered by a shift in the March/May spread, with March shifting to a 0.05 cent premium over May SBH8-K8 versus the prior session’s discount of 0.05 cent.

* Talk of demand for the March contract, which will expire at the end of February, spurred the move, traders said.

* The rally came after data showed late Friday that speculators raised their net short position in raw sugar futures and options to a record 175,421 contracts in the week to Jan. 30.

* On Friday, total open interest rose by 9,053 contracts to 952,483 contracts, the highest since April 2008, ICE data showed.

* May white sugar followed raw sugar higher to settle up $3.50, or 1 percent, at $364.30 per tonne, after falling to $355.70.

COCOA

* March London cocoa settled up 2 pounds, or 0.1 percent, at 1,457 pounds per tonne, after rising to the highest since Nov. 30 at 1,471 pounds.

* Prices were supported by the British pound, which slipped on Brexit negotiation worries.

* March New York cocoa settled down $14, or 0.7 percent, at $2,045 per tonne, after rising to $2,067, also hitting its highest since late November.

* The weak British pound versus the U.S. dollar also pressured the New York market, traders said.

* Cocoa arrivals at ports in top grower Ivory Coast reached about 53,000 tonnes between Jan. 29 and Feb. 4, up from 43,000 tonnes during the same period last season.

COFFEE

* March arabica coffee settled down 0.6 cent, or 0.5 percent, at $1.198 per lb.

* Total open interest rose by 3,862 lots on Friday to a record 246,349 lots, ICE data showed.

* March robusta coffee settled up $16, or 0.9 percent, at $1,780 per tonne.

* Global coffee supplies will shift to a surplus in 2018/19 with top grower Brazil on track to harvest a record crop, but prices will rise modestly by the end of the year, a Reuters poll of 14 traders and analysts showed. (Reporting by Marcy Nicholson in New York and Ana Ionova in London, editing by Jon Boyle and Tom Brown)

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