Raw sugar futures strengthen

• Raw sugar settled up 0.07 cent, or 0.56 percent, at 12.59 cents per lb.
• Arabica coffee settled down 0.4 cent, or 0.4pc, at 94.45 cents per lb.
• New York cocoa settled up $73, or nearly 3pc, at $2,522 per tonne.

NEW YORK: Raw sugar futures strengthened on Tuesday, bolstered by expectations of a short-covering rally and forecasts for a wide deficit this season.

Coffee prices fell, while cocoa rallied.

SUGAR

March raw sugar settled up 0.07 cent, or 0.56 percent, at 12.59 cents per lb.

The Brazilian real strengthened versus the dollar, discouraging exporters in top producer Brazil from selling dollar-denominated commodities like sugar and coffee.

Additionally, funds are heavily net short and primed for a short covering rally, especially given forecasts for a sugar market deficit this year.

"With the speculative net short position having increased, the market is being held up by the expectation of another short-covering rally," Nick Penney, senior trader at Sucden, said in a note to clients.

He added, however: "We feel (raw sugar) has to break 13 cents convincingly for this to take place so for the moment the range continues to be a rough 12.30-12.80."

December white sugar settled up $2.4, or 0.7 percent, at $347.6 per tonne.

December white sugar traded at a premium of $4.20 to March, indicating tightening nearby supply.

COFFEE

December arabica coffee settled down 0.4 cent, or 0.4pc, at 94.45 cents per lb.

The prospect of a large crop in Brazil next year remains a bearish influence, though dealers say the downside is limited below 90 cents, which is near the cost of production even in low cost producers like Brazil.

January robusta coffee settled down $12, or 0.9%, at $1,264 per tonne having hit a contract low on Friday.

COCOA

December New York cocoa settled up $73, or nearly 3pc, at $2,522 per tonne.

The market has steadied somewhat after climbing sharply this month, setting a three-month peak of $2,558 on Friday.

"The first port arrivals figures for Ivory Coast are robust and are prompting many observers to expect a similarly high crop as last year," said Commerzbank in a note.

The bank added, however: "The excessive rainfall in Ivory Coast of late has led to uncertainty. If the rains cause widespread crop diseases and hamper harvesting for any prolonged period, sentiment could turn."

Cocoa arrivals at ports in Ivory Coast reached 132,000 tonnes between Oct. 1-13, exporters estimated on Monday, up around 28pc versus last season.

Ivory Coast and Ghana's threat to possibly halt the cocoa industry's ethical branding schemes poses a major risk to chocolate makers operating in Western markets, where consumer demand for sustainably sourced products is rising.

March London cocoa settled up 25 pounds, or 1.3pc, at 1,887 pounds per tonne.