LONDON, May 14 (Reuters) - Arabica coffee prices fell further on Monday amid signs that speculative short-covering had run out of steam, while raw sugar and cocoa also slipped.
* July arabica coffee was down 0.90 cents, or 0.8 percent, at $1.1850 per lb by 1111 GMT, extending Friday’s losses.
* Dealers pegged the weakness partly on government data that on Friday showed speculators had covered a larger chunk of their short position than participants had expected.
* This signalled fund short-covering, which recently lifted prices to their highest in nearly three months, may have run its course.
* Thin industry buying, meanwhile, has failed to drive further gains, dealers said, with coffee roasters only selectively extending stocks.
* “Knowing the strong hand of the funds and what they can re-establish in short positions, the industry buying is certainly not enough to keep the market on firm footing,” one dealer said.
* Prices have also been under pressure from a weakening Brazilian currency.
* July robusta coffee fell $17, or 1 percent, to$1,741 a tonne, with dealers also pointing to waning buying interest.
* The Brazilian real currency, which encourages producer selling by improving local currency returns, also remained in focus.
* Typically, the real affects the larger arabica market but this year’s large Brazilian conillon crop has raised concerns the weakening currency could inspire Brazilian robusta growers to sell as well.
* “I’m not convinced a lot has actually been fixed yet,” the dealer said. “But, with the real as weak as it’s been, it undoubtedly brings Brazil closer to the robusta market. It just acts as a bit of a dark cloud over the market.”
* Louis Dreyfus Company has offloaded the bulk of its certified robusta coffee stocks ahead of a rule change that will make it more expensive to carry the coffee forward, industry sources told Reuters.
* July raw sugar slipped 0.03 cents, or 0.3 percent, to 11.19 cents per lb.
* Focus remained on weather in Brazil, where a recent dry spell boosted expectations that output could fall even more than initially expected.
* However, ample output from India and Thailand, coupled with forecasts for rain in Centre-South Brazil in the coming days, were limiting upside potential, dealers said.
* August white sugar rose $0.10, or 0.03 percent, to$320.80 a tonne.
* July New York cocoa slipped $20, or 0.7 percent, to$2,785 a tonne.
* July London cocoa fell 9 pounds, or 0.5 percent, to 1,937 pounds a tonne. (Reporting by Ana Ionova; Editing by Jon Boyle)