May 28, 2015 / 12:33 PM / 5 years ago

SOFTS-Raw sugar recovers from lows, arabica coffee steadies

* Fluctuations in Brazil currency and dollar drives prices

* Concerns about frost risks to Brazil coffee diminish

By David Brough

LONDON, May 28 (Reuters) - Raw sugar futures recovered on Thursday from the lowest level in more than six years, but gains were capped by vast supplies, while arabica coffee and New York cocoa were little changed.

Dealers said they expected fluctuations in the Brazilian real currency and the U.S. dollar to drive prices in the short term.

“The market is following macroeconomic and currency trends,” a senior analyst said. “The 12 cents area seems to be holding some significance,” he added, referring to sugar’s recent price range.

July raw sugar futures on ICE were up 0.2 cent, or 1.7 percent, at 12.07 cents a lb at 1157 GMT, after dipping on Wednesday to the lowest since January 2009 at 11.83 cents.

August white sugar on ICE traded up $2.50, or 0.7 percent, at $348.20 per tonne.

Arabica coffee futures steadied, supported by an unchanged crop forecast in top grower Brazil. This was viewed as supportive after recent estimates had called for an increasingly large crop, traders said.

“On the upside, on any recovery in futures will look to target fresh resistance towards $1.35 a lb while protracted moves could see gains test levels towards $1.40,” said Kash Kamal, senior research analyst with Sucden Financial Research.

July arabica coffee traded up 0.95 cent, or 0.8 percent, at $1.2545 per lb after falling on Wednesday to $1.2355, the lowest since Jan. 31, 2014.

Diminishing concerns over risks of frost damage to coffee trees in Brazil are eroding the appeal of once-popular September arabica options, traders said.

Robusta coffee futures held steady, within sight of Tuesday’s 1-1/2-year low, pressured by rains in top grower Vietnam.

July robusta traded up $6, or 0.4 percent, at $1,624 a tonne, up from Tuesday’s low at $1,566.

New York July cocoa eased $6, or 0.2 percent, to $3,128 per tonne.

July London cocoa traded up 4 pounds, or 0.2 percent, at 2,130 pounds a tonne, a contract high. (Editing by Susan Thomas)

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