Raw sugar erases previous session's losses, arabica climbs

NEW YORK/LONDON: Raw sugar futures on ICE rose on Tuesday, erasing the previous session's losses, while New York cocoa climbed to new nine-month highs.

SUGAR

May raw sugar settled up 0.21 cent, or 1.7 percent, at 12.78 cents per lb.

Futures remained within their well-established recent range, as producer selling above 12.8 cents continues to help keep a lid on the market.

Prices are in part underpinned, however, by the possibility of an El Nino weather event, which is linked to dry weather across Asia Pacific.

"A strengthening El Nino could result in lower crops across southeast Asia. Thailand has actually been a little dry and the 2019/20 crop will likely not reach potential," Rabobank said in a market note.

Monsoon rains in India are expected to be below normal this year, the country's only private weather forecasting agency said last week.

May white sugar settled up $2, or 0.6 percent, at $328.20 a tonne.

France's sugar beet area is expected to decline 6.3 percent compared to last year, the farm ministry said.

COFFEE

May arabica coffee settled up 0.7 cent, or 0.8 percent, at 93.65 cents per lb, pulling further away from last week's 13-year low of 91.25 cents.

Total open interest declined for the fifth straight session to 340,732 contracts on Monday after reaching record highs last week, ICE data show.

The scope for any sustained rebound appeared limited with supplies plentiful and exchange stocks well above last year's levels.

The extra coffee in exchange stocks is primarily from Honduras.

"The potential for more Honduran coffee turning up at the exchange still weighs heavily on the arabica market," Rabobank said.

May robusta coffee settled down $6, or 0.4 percent, at $1,420 a tonne.

COCOA

May New York cocoa settled up $16, or 0.7 percent, at $2,446 a tonne after touching a nine-month high of $2,451.

The contract had its 12th positive finish in 13 sessions as a short-covering rally has lifted prices.

This was the fourth consecutive session that the contract had been in technically overbought territory on the relative strength index.

Dealers were watching the possibility of an increase in profit taking and long liquidation on the back of the rally.

May London cocoa settled up 9 pounds, or 0.5 percent, at 1,804 pounds a tonne, after earlier falling to a one-week low of 1,752.

Above-average rainfall last week in most of Ivory Coast's cocoa regions should boost the April-September mid-crop, but strong winds are worrying, farmers said on Monday.