LONDON: Raw sugar futures on ICE rose to a 3-1/2 month high on Monday, boosted by fund short covering against the backdrop of more use of cane in Brazil to produce ethanol rather than sugar.
Cocoa prices suffered a modest setback after a recent strong advance, although the weakness of sterling helped to limit losses in the London contract.
SUGAR
March raw sugar was up 0.01 cents, or 0.1 percent, at 14.97 cents per lb by 1152 GMT after rising to a peak of 15.03 cents, the highest for the front month since Aug. 1.
"Higher energy prices will continue to draw on global raw sugar supplies by rationing away the anticipated raw sugar surplus into the Brazil domestic fuel pool," Tropical Research Services said in a market note on Monday.
Dealers were awaiting cane crushing data for Centre-South Brazil covering the second half of October which is expected to be issued later on Monday.
A survey of analysts by S&P Global Platts saw a CS Brazil cane crush of 29.68 million tonnes, down 8.4 percent from the prior two weeks.
Dealers said short covering by speculators had also contributed to the recent strength of prices.
Speculators cut a bearish bet in sugar to a six-week low on ICE Futures U.S in the week to Oct. 31, US government data showed on Friday.
March white sugar rose by $1.40, or 0.4 percent, to $390.70 a tonne.
Wilmar International on Monday posted a 6 percent fall in third-quarter net profit, partly driven by weaker results in its sugar business.
The company said the decline was due to a new marketing programme in Australia which meant some of the sugar produced would only be sold in subsequent quarters. This was partially mitigated by better performance in the merchandising business.
COCOA
March New York cocoa was off $23, or 1.0 percent, at $2,189 a tonne, with the market suffering a modest setback after its recent climb to a 10-month high.
March London cocoa was off 3 pounds, or 0.2 percent, at 1,661 pounds a tonne, with losses curbed by the weakness of sterling.
Sterling fell by nearly one percent on Monday, buffeted by political headwinds that put it on course for its biggest daily loss in more than 10 days.
COFFEE
March arabica coffee fell by 0.50 cents, or 0.4 percent, to $1.3040 per lb.
Volcafe, the Swiss-based coffee division of commodity trade house ED&F Man, said on Saturday it saw world top coffee producer Brazil's stocks of arabica ending the 2017/2018 season at a five-year low of 15 million 60-kg bags.
January robusta coffee was off $6, or 0.3 percent, at $1,810 a tonne.
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