Raw sugar rebounds, London cocoa dips to 2-week low

LONDON: Raw sugar futures rose on Monday, regaining some ground after their recent fall, while arabica coffee also advanced and London cocoa fell to a two-week low.

SUGAR

May raw sugar was up 0.30 cent, or 1.8 percent, at 17.06 cents a lb by 1413 GMT. The front-month contract has regained some ground after falling to a 10-month low of 16.58 cents on Thursday.

Dealers said the recent decline may have been overdone as long liquidation by trend-following funds helped to exaggerate the fall.

"Global sugar weather this calendar year to date has been benign, encouraging an assumption that the global sugar production potential will be realized. But this is far from certain," Tropical Research Services said in a market note.

"Risks to that outcome remain," it added, noting it would need to see "additional global sugar weather cards out of the deck" before considering Friday's closing price as fair value.

Speculators continued to reduce a bullish position in raw sugar contracts on ICE Futures US in the week to March 28, US Commodity Futures Trading Commission data showed on Friday.

May white sugar rose $3.90, or 0.8 percent, to $481.10 a tonne.

COCOA

May London cocoa was down 20 pounds or 1.2 percent at 1,659 pounds a tonne after dipping to a two-week low of 1,650 pounds.

Dealers said the market was back on the defensive after its recent rally which was fuelled largely by short covering from speculators.

"The (technical) indicators have turned to favour the downside," Sucden Financial analyst Geordie Wilkes said in a market note.

Port arrivals in top grower Ivory Coast remained well ahead of last year's pace with a large global surplus widely expected in the current 2016/17 season.

May New York cocoa was down $19 or 0.9 percent at $2,076 a tonne.

Good rain and sun last week in most of Ivory Coast's main cocoa regions will improve the size and quality of the April-to-September cocoa mid-crop although dry weather persisted in certain areas of the south and east, farmers said.

COFFEE

May arabica coffee rose 1.5 cents, or 1.1 percent, to $1.4080 per lb as the market pulled further away from last week's eight-week low of $1.3620.

Dealers said the rise was largely driven by chart-based buying with the market needing to close above the 10-day moving average to sustain upward momentum.

May robusta rose $1, or 0.05 percent, to $2,150 a tonne.