May 3, 2018 / 11:49 AM / 17 days ago

SOFTS-Raw sugar slips as supply glut in focus, London cocoa also falls

LONDON, May 3 (Reuters) - Raw sugar futures on ICE fell on Thursday, as ample global supplies remained in focus and a weak Brazilian currency added pressure, while arabica coffee rose and cocoa slipped.

SUGAR

* July raw sugar was down 0.09 cents, or 0.8 percent, at 11.66 cents per lb by 1122 GMT.

* Prices fell sharply in the prior session in tandem with white sugar, after India approved plans to subsidise its cane farmers, which could pave the way for exports to the world market.

* Both markets recovered before the close on profit-taking by short sellers, but sentiment was still bearish on Thursday as the focus remained on a global supply glut, amid strong production from India and Thailand.

* Prices were also pressured by the overnight decline in the Brazilian real to its weakest since June 2016.

* “We had a new low in the (real), which many analysts were suggesting was a ‘gift’ to the Brazilian producer hedgers,” Sucden Financial’s Tom Kujawa said in a market note.

* A weaker Brazilian currency encourages producers to sell by increasing their returns in local currency terms.

* August white sugar was down $0.40, or 0.1 percent, at $323.40 a tonne.

COFFEE

* July arabica coffee rose 0.80 cents, or 0.7 percent, to $1.2455 per lb, after climbing to $1.2470.

* Prices rose sharply in the prior session, hitting their highest since February before retreating somewhat in late trading.

* Dealers said the market has been supported in recent sessions by short-covering by speculators, who hold a large bearish stance in the market.

* However, upside potential was capped by expectations that Brazilian producers will soon begin to hedge a massive crop, they said.

* “The more the real weakens, the better this level is for Brazil,” said one dealer. “So you can expect them to come in and hedge. But the funds are likely to protect their short as well, so I don’t expect any further rally.”

* July robusta coffee rose $7, or 0.4 percent, to $1,814 a tonne.

* Physical differentials have weakened recently, with one dealer pegging the discount for Vietnam beans and Brazil new-crop conillon at roughly $100 per tonne.

COCOA

* July London cocoa fell 19 pounds or 1 percent to 1,910 pounds a tonne in thin volume, as speculative buying dried up.

* Prices climbed to their highest since November 2016 in the prior session.

* July New York cocoa was down $22, or 0.8 percent, at $2,791 a tonne. (Reporting by Ana Ionova; Editing by Adrian Croft)

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