Raw sugar sets two-month low, cocoa consolidates

Raw sugar futures fell to a two-month low on Friday but held above a major support level as trade buying helped to temporarily stem a fund-driven decline in prices. March raw sugar was unchanged at 20.22 cents per lb at 1448 GMT after earlier dipping to a low of 20.08 cents, the weakest for the front month since September 15.
Dealers said buying emerged just above the major support at 20 cents a lb on the March contract and a breach of that level could trigger another wave of fund long liquidation. "March's ability to hold 20 cents could be critical to the next move," said James Liddiard of Agrilion Commodity Advisers.
March white sugar fell $0.60, or 0.1 percent, at $537.30 per tonne. The decline has been triggered partly by sentiment that an expected global shortfall in the 2016/17 season may be lower than previously expected, a view reinforced by a report issued by the US Department of Agriculture on Thursday.
Robusta coffee futures were lower as favourable weather boosted harvest progress in top producer Vietnam. Sunny days this week have been supporting harvesting in the Central Highlands coffee belt of Vietnam. January robusta fell $19, or 0.9 percent, to $2,144 a tonne.
Dealers said the market remained underpinned by tight supplies after poor robusta harvests in Brazil and Indonesia and the prospect of a smaller crop in Vietnam. Production in Indonesia was curbed by dry weather in late 2015 but conditions for the next crop have been much wetter. "While this will provide relief from the excessive dryness of the 2015 El Nino event, it is not yet clear to what extent this will improve Indonesia's prospects for coffee production," a report produced by the USDA's attache in Indonesia said.
"Growers note that although the rain is providing a welcome relief, its frequency and duration, as well as its interference with pollination will determine yields in the coming year." March arabica was up 0.50 cent or 0.3 percent at $1.6345 per lb. Cocoa prices consolidated after New York futures had slid to the lowest level in more than three years on Thursday weighed by an improving crop outlook in West Africa which reinforced expectations there would be a global surplus in 2016/17. March New York cocoa was up a modest $8, or 0.3 percent, at $2,427 a tonne after setting a low of $2,358 on Thursday, the weakest for the second position since August 2013. March London cocoa rose 4 pounds or 0.2 percent to 2,005 pounds a tonne.