LONDON: Raw sugar futures on ICE edged higher on Monday as a bout of fund selling which drove prices to a 2-1/2 month low last week appeared to have abated. March raw sugar was up 0.17 cents, or 0.9 percent, at 20.01 cents per lb at 1305 GMT.
The front month had dipped to a low of 19.57 cents on Wednesday, its weakest since Sept. 1, and rebounded off a low of 19.58 cents on Friday. Funds have been scaling back long positions during the last few weeks, driving prices down from a peak of 23.90 cents in early October.
Dealers said the market would keep a close eye on weekly CFTC data, to be issued later on Monday, to assess how far the fund net long had been reduced.
"The number tonight might give us a clearer idea of what they dumped," one dealer said, adding a large drop in the speculative net long would be supportive.
The last report, issued on Nov. 18, put it at 213,006 lots. "It would not surprise us to see the overall speculative long including options near or below 200,000 lots.
This would ... reduce the downward pressure somewhat," said Nick Penney, senior trader at Sucden Financial. Dealers said a strengthening in Brazil's real currency against the dollar on Monday helped to support prices, making international prices less attractive in the world's top producer of sugar and coffee.
March white sugar was up $4.20 or 0.8 percent at $531.70 per tonne.
Coffee prices also edged up, boosted partly by the stronger real with March up 0.75 cents or 0.5 percent at $1.5615 per lb. Marex Spectron on Monday forecast a marginal global surplus of 0.3 million (60-kg) bags in the 2016/17 season compared with a deficit of 2.0 million bags in 2015/16.
The broker said it anticipated a surplus of 5.8 million bags of arabica coffee largely offset by a deficit of 5.6 million bags of robusta.
"We reiterate our view that the arbitrage needs to tighten, especially given the positioning that currently exists in both markets," Marex said in a report, referring to the current premium of arabica to robusta coffee. January robusta coffee was up $26 or 1.3 percent at $2,058 a tonne.
Cocoa futures were little changed with March London down a marginal 1 pound or 0.05 percent at 1,984 pounds a tonne while March New York fell $5 or 0.2 percent to $2,410.
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