Raw sugar futures rise as fears of large physical delivery subside

LONDON: Raw sugar futures on ICE steadied on Thursday after hitting a three week low in the prior session, as fears over a large physical delivery against the July contract that expires on Friday eased.

SUGAR

* July raw sugar rose 0.32 cents, or 2.7%, to 12.35 cents per lb at 1358 GMT, having hit a three-week low of 11.98 in the prior session.

* The rise came after open interest in the expiring contract declined by 25,608 lots to 63,737, indicating a smaller physical delivery than previously feared.

* Dealers fear a large physical delivery indicates plentiful supplies and sluggish demand.

* "Whether the movement of sugar from one or two large trade houses will have any long term impact on sugar prices is open to debate but it will be interesting to see how it all pans out," one dealer said.

* In industry news, India, a top sugar producer, saw monsoon rains 24% below average in the week ended June 26, the weather office said. The below-average rainfall this season threatens to curtail crop yields but Indian sugar stocks remain ample, weighing on the market.

* Elsewhere, sugar production in Brazil's main producing region in the first half of June remained below levels seen at this time in the previous season, cane industry group Unica said.

* August white sugar rose $6, or 1.8%, to $325.20 per tonne.

COFFEE

* September arabica coffee rose 0.85 cents, or 0.8%, to $1.0690 per lb, after rising to a three-week peak of $1.0820 on Wednesday.

* Prices have picked up some support in recent weeks from a weaker dollar and stronger real, which discourages Brazilian producer selling of dollar-priced coffee, but plentiful global supplies continue to weigh.

* September robusta coffee rose $2, or 0.1%, to $1,436 a tonne.

* Coffee prices in Vietnam edged higher this week as supplies ran low, with farmers unwilling to sell below 35,000 dong per kg and almost no new deals made this week.

COCOA

* September New York cocoa fell $21, or 0.9%, to $2,439 per tonne.

* Dealers are keeping a close watch on the weather in top producer Ivory Coast, where dryness is a concern.

* September London cocoa fell 14 pounds, or 0.8%, to 1,813 pounds a tonne.