Sugar dips; coffee firms on dry weather in Asia, Brazil

Raw sugar futures on ICE eased on Tuesday from a 1-1/2-year peak touched last week, while robusta coffee touched a nine-month high supported by concerns over the impact of dry weather in Brazil, Vietnam and Indonesia.

New York cocoa steadied near a one-month low, pressured by weak chart signals.

Raw sugar futures eased on speculative selling, although prices remained in sight of Thursday’s 1-1/2-year high.

“There’s a bit of profit taking. Funds have had a clear run-up,” a senior trader said.

“The funds are sitting on good profits at these positions.”

Traders said they expected the next Brazilian cane crush data for the first half of May to show some interruptions due to rain.

Brazil’s centre-south sugar mills crushed 36.07 million tonnes of cane in the second half of April. Traders said the data, which showed a brisk crush, was broadly in line with expectations.

July raw sugar traded down 0.14 cent, or 0.8 percent, at 16.75 cents per lb at 1006 GMT, nearing Thursday’s 1-1/2-year high of 17.00 cents.

Raw sugar futures rose strongly last week on speculative buying, concerns over dry weather in number 2 producer India, and forecasts for rain in Brazil which could slow the harvest.

“While a test of the 17 cent level looks a possibility today any significant move higher would seem unlikely,” a broker said.

“While the funds may not liquidate, they are likely to have limited ammunition to add to their longs.”

August white sugar was down $2.60, or 0.5 percent, at $478.10 per tonne.

Robusta coffee futures hit the highest level since August, underpinned by concerns over prolonged dry weather in leading producers in Brazil and Asia.

“The coffee market is currently being driven by robusta,” Commerzbank said in a note.

“It has soared by 27 percent since the end of February because the next crops in the major producing countries of Vietnam, Indonesia and Brazil look set to disappoint amid overly dry weather.”

July robusta was $17, or 1 percent, at $1,703 per tonne, having touched a nine-month peak of $1,707.

July arabica was up 0.75 cent, or 0.6 percent, at $1.3435 per lb, after touching $1.3480, the highest since March 23.

London July cocoa was down 10 pounds, or 0.5 percent, at 2,147 pounds per tonne.

New York July cocoa was up $5, or 0.2 percent, at $2,932 per tonne, after dipping to $2,919, the lowest since mid-April.

(Reuters) –

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