LONDON: Sugar, coffee and cocoa futures on ICE firmed in light trade on Thursday, buoyed by stronger agricultural commodities and a softer dollar.
"The rise in soft commodities is primarily on the back of higher agricultural markets, and I think the weak dollar is supportive," said Sudakshina Unnikrishnan, a soft commodities analyst with Barclays Capital.
Nick Penney of brokerage Sucden Financial said, "We have noted substantial producer selling into this rally but are mindful that it is not all about sugar, more about agricultural commodities in general."
US soybeans rose to a record high on Thursday, and front-month corn scaled an all-time high as weather maps showed no sign of an end to a drought that has damaged US crops and provoked concern about food supplies.
The sugar market was underpinned by the prospect that weak monsoon rains may reduce production in top consumer India, dealers said. Rains in Australia have also slowed the flow of supplies from the world's third-largest raw sugar exporter.
The sugar market got a boost from news on Wednesday that Copersucar, a leading sugar and ethanol trader in top producer Brazil, said rains forced 42 percent of its associate mills to stop crushing and it may turn to buying the sweetener. [ID :nL2E8II8A7]
Benchmark October sugar futures on ICE firmed 0.07 cent or 0.3 percent to 23.02 cents a lb at 1136 GMT.
White sugar futures on Liffe edged up with October up $4.00, or 0.6 percent, higher at $628.70 a tonne in moderate volume of 2,543 lots.
Arabica coffee futures on ICE were marginally higher in thin trade with September up 0.2 cent or 0.1 percent at $1.8235 a lb.
Dealers said the market continued to keep a close watch on the crop outlook in Brazil with concerns that wet weather will lead to quality problems.
"It's a wait and watch situation," Unnikrishnan said.
Robusta coffee futures on Liffe were also slightly higher with September up $28 or 1.3 percent at $2,139 a tonne.
Purchases by roasters helped Indonesian robustas trade at premiums to London futures despite the arrival of more beans from plantations, while buyers were put off purchasing from Vietnam due to the quality of beans there, dealers said on Thursday.
Coffee exports from Honduras, Central America's top producer, are expected to reach nearly 5 million 60-kg bags for the current 2011/2012 harvesting season, up 29 percent over the previous cycle.
Cocoa futures extended gains after triggering buy stops in early dealings.
"The market opened steady. Then we had buy stops at around $2,250 basis September," one London-based cocoa futures broker said.
Dealers awaited North American second quarter cocoa grind data, a measure of demand, due on Thursday at 2000 GMT, following last week's 17.8 percent year-on-year fall in the European second quarter grind.
Some European traders anticipated a moderate drop year-on-year in the North American grind tonnage.
ICE September cocoa futures rose $29 or 1.3 percent to $2,233 a tonne.
London September cocoa was up 17 pounds or 1.1 percent at 1,518 pounds per tonne in light volume of 1,766 lots.
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