LONDON: Raw sugar prices on ICE steadied on Monday after hitting a 1-1/2-month high on Friday amid rising corn prices and worries over Indian production, while arabica coffee hit a three-week trough.
SUGAR
July raw sugar was flat at 12.75 cents per lb at 1400 GMT, after hitting 12.78 on Friday.
Sugar is being driven by soaring corn prices, which could tempt ethanol makers to feed their plants with cane rather than corn. This would mean less cane for making sugar.
Planting of crops in India, the world's second largest sugar producer, has been delayed because of the slow progress of monsoon rains.
"(Sugar) remains well supported by higher corn prices and chatter about lower sugar production in India next season," said a dealer. He added, however, that price gains in sugar were capped by ample stocks and producers selling at the highs.
Brazil's Copersucar, the world's largest sugar and ethanol merchant, said ethanol demand in the United States could increase by 50pc when the new E15 policy is fully implemented.
In the week to June 11, speculators on ICE Futures US sharply reduced their net short position in raw sugar to its smallest in about a month.
August white sugar fell 10 cents, or 0.03pc, to $334.90 per tonne.
COFFEE
September arabica coffee fell 0.2 cents, or 0.2pc, to 97.85 cents per lb, having hit a low of 97.05 cents.
Prices plunged about 5.3pc last week, the biggest weekly fall in 1-1/2 years.
"(Coffee) is oversupplied and in very steep contango, which rewards sellers and means any short covering at this stage attracts new selling," said Ole Hansen, head of commodity strategy at Saxo Bank.
Also hurting coffee, the Brazilian real sank last week to its weakest against the US dollar in over a week, making it more profitable for Brazilian producers to sell dollar-priced coffee.
September robusta coffee fell $10, or 0.7pc, to $1,383 per tonne.
COCOA
September London cocoa fell 6 pounds, or 0.3pc, to 1,839 pounds per tonne.
The contract hit an 11-month high on Wednesday as top growers Ivory Coast and Ghana announced plans to set a floor price for cocoa.
Bad weather and crop disease have also hampered the cocoa crop in Ghana.
Cocoa arrivals at ports in top grower Ivory Coast rose about 12pc between Oct. 1 and June 16 from the same period last season.
September New York cocoa fell $14, or 0.6pc, to $2,482 per tonne. The contract rose 1.2pc last week.
In the week to June 11, speculators on ICE Futures US switched to a net long position in cocoa for the first time since January.
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