Raw sugar gains on short-covering, coffee falls

LONDON: Raw sugar prices on ICE rose on Monday as funds continued to cover their shorts, having last week bet the sweetener down to its lowest since October.

SUGAR

* July raw sugar was up 0.06 cents, or 0.5%, at 11.78 cents per lb by 1057 GMT, having clocked its third straight weekly decline last week.

* Speculators increased their net short position in ICE raw sugar in the week to May 7 to its highest since late March, data showed.

* "While the market still remains over-sold, traders will be wary of selling ... a bout of consolidation may be seen," one dealer said.

* But he added: "There is precious little reason to believe prices will rally too far, with the short-term specs seeing any improvement as an opportunity to sell."

* Mills in Brazil's main centre-south cane region produced 38% less sugar in April compared with the same month last year.

* Weighing on prices were a generally weak Brazilian real and broad economic concerns, heightened in no small part by the United States' move to raise tariffs on Chinese goods.

* Rising stocks in India are also a worry, dealers said. Indian sugar mills have contracted to export 3 million tonnes of sugar since Oct. 1, a leading trade body said.

* ICE August white sugar rose $0.30, or 0.1%, to $323.90 a tonne.

COCOA

* July London cocoa was flat at 1,710 pounds a tonne, having hit its lowest since April 24 at 1,701 pounds. London cocoa lost 3.1% last week.

* A dealer said funds were temporarily liquidating large long positions built up as cocoa rose to a nine-month high on May 1, adding that supply in Europe remains tight.

* The premium for London May cocoa over July <LCCK9-N9> hit a record 158 pounds a tonne earlier, indicating scarce nearby supply.

* July New York cocoa was flat at $2,312 a tonne, having declined by 2.7% last week.

* Speculators cut their net short position in ICE cocoa in the week to May 7.

COFFEE

* July robusta coffee fell by $14, or 1%, to $1,350 a tonne, having slid to a nine-year low of $1,267 last week.

* July arabica coffee dropped 0.9 cents, or 1%, to 89.85 cents per lb, having hit a 13-year low of 87.6 cents last week.

* Speculators boosted their bearish stance in ICE arabica in the week to May 7 - the first time in four weeks that they have added to short positions.

* Bearish fundamentals remain in coffee as the Brazilian harvest gathers pace in an already oversupplied market.