SOFTS-Raw sugar climbs to near 3-month peak as funds buy

LONDON: Raw sugar futures on ICE climbed to the highest level in almost three months on Monday, boosted by fund buying, while arabica coffee prices fell slightly.

SUGAR

July raw sugar was up 0.22 cents, or 1.8pc, at 12.24 cents per lb by 1354 GMT after peaking at 12.27 cents, the highest level for the front month since March 11.

Dealers said the recent recovery in other markets, including global equities and crude oil, have given a significant boost to sugar prices.

"It (the rally) is entirely based on a rush to buy 'risk on' assets and sugar is one of those," analyst Robin Shaw of Marex Spectron said in a note.

Shaw said market fundamentals were less supportive with current prices meaning it is more attractive for mills in Centre-South Brazil to use cane to make sugar rather than ethanol, which could lead to a considerable global surplus.

"And that surplus is probably growing with lower sugar consumption worldwide," he added.

August white sugar rose $4.40, or 1.1pc, to $397.30 a tonne.

COFFEE

July arabica coffee fell 0.3 cents, or 0.3pc, to 98.60 cents per lb, weighed by the prospect of a huge crop in Brazil this year and weakening global consumption.

Dealers noted speculators had switched to a net short in the week to June 2.

July robusta coffee was up $7, or 0.6pc, at $1,240 a tonne.

COCOA

July New York cocoa was down $4, or 0.2pc, at $2,394 a tonne with the market underpinned by concerns about dry weather in top grower Ivory Coast.

Below average rainfall in most of Ivory Coast's cocoa-growing regions last week meant more downpours were needed to strengthen the crop, farmers said on Monday.

Weak demand, however, remains a bearish influence.

July London cocoa fell 18 pounds, or 1.0pc, to 1,849 pounds a tonne?.