Sugar edges off 4-month high

Cocoa futures prices were little changed in thin volumes, with upside weighed by ample supplies from West Africa.

ICE raw sugar futures jumped over 5 percent to trade at a fresh four-month high, supported by lower-than-expected crush data in Brazil as dealers expressed concerns over cold weather, and later prices eased back slightly.

Expectations of further support by Greece's parliament for austerity measures had also supported the softs complex, including sugar.

"A combination of macro news (the Greek acceptance in parliament of the austerity package), firmer grains and a weaker dollar/euro rate, plus expectations of a reduction in the (output) estimate in Brazil, are continuing to underpin sugar," said Nick Penney of brokerage Sucden Financial.

Dealers focused on the expiry on Thursday of the ICE July raw sugar futures contract, noting that they expected a moderate to large delivery, up to one million tonnes.

ICE October raw sugar futures reversed gains and were down 0.48 cent or 1.8 percent to 26.44 cents a lb at 1415 GMT. Front-month July raw sugar futures touched a four-month high of 30.88 cents a lb earlier on Thursday.

Liffe August white sugar was down $9.50 or 1.2 percent to $757.20 per tonne in thin volume of 2,751 lots.

ICE arabica coffee futures rose, supported by the weaker dollar and reports that frost had reached at least two minor coffee regions in top grower Brazil's Parana state, although it was unlikely to put a major dent in next year's output.

"A combination of concerns over frost in Brazil, scaled back output projections for Vietnamese robustas, the weaker dollar, European macroeconomic austerity steps, and higher grains prices, are supporting the softs, including sugar and coffee," said a veteran London-based coffee futures dealer.

Vietnam, the world's second-largest coffee producer after Brazil, is forecast to harvest 18 million bags from its 2011/12 crop, well below market projections, an industry official said on Thursday.

ICE September arabica coffee futures were up 3.85 cent or 1.5 percent to $2.6455 per lb in light volume of 6,286 lots at 1417 GMT.

Liffe September robusta coffee futures were up $14 or 0.6 percent to $2,486 per tonne.

ICE cocoa futures were little changed, supported by the softer dollar, but ample supplies from West Africa restricted upside price potential.

"The latest cocoa crop in the Ivory Coast and other origin countries in West Africa were very good," said Juergen Steinemann, CEO of Barry Callebaut after the chocolate maker released its results.

"This year the cocoa bean supply should outstrip demand so there will be enough beans for production and also for building stock."

ICE September cocoa was up $3 or 0.1 percent to $3,122 per tonne in light volume of 5,052 lots at 1418 GMT.

Liffe September cocoa was up 13 pounds or 0.7 percent to 1,972 pounds a tonne in moderate volume of 9,016 lots.

Copyright Reuters, 2011