Raw sugar futures rise as short-covering expected

• Raw sugar futures on ICE rose on Monday.
• March raw sugar settled up 0.19 cent, or 1.5%, at 12.54 cents per lb.
• Dealers said the increase was larger than expected.

NEW YORK/ LONDON: Raw sugar futures on ICE rose on Monday, hitting their highest in nearly two weeks amid fund short-covering and as the Brazilian real currency strengthened.

SUGAR

* March raw sugar settled up 0.19 cent, or 1.5%, at 12.54 cents per lb, having touched a near two-week high of 12.59 cents. The contract settled up 0.2% last week.

* Sugar speculators on ICE increased their net short position in the week ended Oct. 22 by 29,174 contracts to 215,539 contracts.

* Dealers said the increase was larger than expected, making the market vulnerable to a bout of short-covering.

* "It is difficult to get too enthusiastic about the market at the moment. However, further gains would seem more likely than a decline," said a dealer.

* Helping sugar, the Brazilian real hit its highest in 2-1/2 months. A stronger real discourages Brazilian producer selling by lowering the price of dollar-denominated sugar in local currency terms.

* December white sugar settled up $3.6, or 1.2%, at $340.8 per tonne.

* The European Union's crop monitoring service on Monday cut its forecast for this year's EU sugar beet yield to 71.3 tonnes per hectare. This is still 3.5% above last year's harvest.

COFFEE

* December arabica coffee settled up 1.05 cent, or 1.1%, at $1.005 per lb.

* Arabica prices remain at historically low levels however, at or below the cost of production for many regions.

* "There is a disconnect between weak Arabica futures and the firm cash market. At some point, they must reconnect. Arabica needs to reprice higher," said broker Marex Spectron in a note, adding this will happen once certified stocks "decrease to a level that reduces or eliminates the contango." It sees certified stocks halving by next summer.

* Arabica coffee speculators on ICE cut their net short position in the week ended Oct. 22 by 3,051 contracts to 55,374.

* January robusta coffee settled up $27, or 2.2%, at $1,277 per tonne.

COCOA

* March London cocoa settled up 4 pounds, or 0.8%, at 1,858 pounds per tonne.

* Above-average rains in most of Ivory Coast's cocoa growing regions last week have raised concerns about the quality of the beans because of high moisture levels, farmers said on Monday.

* March New York cocoa settled up $21, or 0.9%, at $2,504 per tonne.

* Cocoa speculators on ICE cut their net long position in the week ended Oct. 22 by 2,171 contracts to 7,450.

* Ghana's graded and sealed cocoa arrivals hit 44,000 tonnes between Oct. 1 and Oct. 17, up 7.3% from the same period of the previous season.