London coffee, sugar rise

Coffee, sugar and cocoa futures rose on Friday on short covering as investors' attention turned to this weekend's summit of the Group of 20 industrialised and emerging economies. "A few shorts are scrambling to square positions into the weekend, ahead of the G20 summit," said Nick Hungate, a soft commodities trader with Rabobank.
Europe officially fell into recession on Friday and the US economy suffered further blows as world leaders headed to Washington to address the worst financial crisis in 80 years. Coffee futures were higher with January robustas in London supported by fund short-covering.
Dealers said there was talk of emerging tightness on January, the last month on the 5-tonne contract. "Maybe they (funds) are getting panicked a little bit," one dealer said. "It is unusual for January to get squeezed but this is the last chance on the 5-tonne contract and maybe that is going to happen."
January robustas settled up $23, or 1.3 percent, at $1,828 a tonne. The contract's premium to March has risen to about $100, compared with a discount of more than $40 a couple of weeks ago. Arabica futures on ICE were also higher with March up 0.70 cents or 0.6 percent at $1.1565 per lb.
Brazil's 2009/10 (July/June) coffee crop was seen at 37 million 60-kg bags compared with the 45.8 million bags expected from the current record crop that just finished harvest, the agriculture ministry's executive secretary, Silas Brasileiro, told Reuters on Friday. Sugar futures rose on investor short-covering ahead of the weekend, with attention focused on the G20 summit.
ICE March raw sugar was up 0.17 cent, or 1.5 percent, to 11.59 cents a lb. March white sugar in London settled up $2.30 at $323.30 per tonne. Prospects of a widening global sugar deficit to 2010 should help to underpin sugar prices, dealers said.
Thailand is expected to start its 2008/09 sugar cane crushing season on November 26 after a month-long delay caused by rain and flooding that disrupted harvesting and transport, industry officials said on Friday. Cocoa prices in London firmed, boosted by industry buying and short covering by funds. Dealers said the weakness of sterling was also supportive. The pound sell to a 13-year low against a basket of currencies on Friday.
The rise came against the backdrop of constructive fundamentals. March cocoa in London settled 15 pounds higher at 1,361 pounds a tonne, while March cocoa on ICE was $17 higher at $1,966 a tonne. December cocoa on ICE rose strongly, standing $113 higher at $2,040 a tonne with the advance linked to first notice day on the front month.