NEW YORK/LONDON: Raw sugar futures on ICE inched up on limited short-covering after touching an almost three-year low on Thursday, as expectations of ample global supplies weighed on prices, dealers said.
ICE cocoa climbed to a four-month high, while arabica futures edged down, hovering close to a near three-year low.
Spot May raw sugar futures on ICE Futures US inched up 0.01 cent, or 0.06 percent, to finish at 17.41 cents a lb, after falling to 17.25 cents, the lowest level for the benchmark front-month contract since July 2010.
Open interest in May totaled 61,954 lots on Wednesday.
The most-active July contract settled up 0.01 cent, or 0.06 percent, at 17.38 cents a lb, also touching a low of 17.25 cents a lb.
A dip to the intraday low prompted limited short-covering, which buoyed prices by the end of the session, dealers said.
Raw sugar prices have fallen more than 50 percent since peaking at 36.08 cents in February 2011, driven down by successive seasons of supply outstripping demand.
Prices now have limited technical support in the 17 to 17.25-cent range after trading in a tight range throughout the month, dealers said.
"We set new contract lows and broke out of our April range, which brought in technical selling. We're trying to get above the previous low, but we're still under pressure," said Michael McDougall, vice president at Newedge in New York.
Dealers said there had been only light buying by consumers while producer selling was capping rallies.
Production in top grower Brazil was ramping up after rain delays early in the harvest and a record cane crop in the world's top grower is seen this year.
"As we approach the (cane) crush in earnest in CS (centre-south) Brazil, more sugar will emerge and will need to find a home. End users have been patient and are letting the market come to them," Nick Penney of Sucden said in a market note.
Recent efforts by the Brazilian government to support its struggling ethanol industry were seen as some support for sugar prices, as a greater diversion of cane into ethanol stands to reduce a steep global sweetener surplus. ID:nL2N0DA1E3]
But the effects of those efforts remains to be seen and have not outweighed technical bearishness in the market, dealers have said.
The improving weather has prompted the May/July spread to narrow <SB-1=R>, though the front-month still held a slight premium to the second-month, often interpreted as demand or concern over supply in the near-term.
August white sugar on Liffe fell by $0.90, or 0.2 percent, to finish at $498.60 a tonne.
COCOA RISES TO FRESH FOUR-MONTH HIGH
July cocoa on ICE settled up $34, or 1.5 percent at $2,360 a tonne, after touching $2,365 a tonne, the highest price since late December. Prices reached a high of $2,373 after the settlement.
The second-month contract has risen more than 16 percent since touching a low of $2,034 in early March, surging past levels of technical resistance.
A strong technical chart may also be encouraging investors to buy, said James Cordier, principal and founder of Optionsellers.com, on Thursday.
"It looks like we are going to $2,400 (per tonne), where we may find a bit of resistance," said Cordier.
Traders more than tripled their net long position in cocoa futures and options, increasing it to the highest since Jan. 1, US government data showed on Friday.
News of a larger-than-expected decline in Asia's cocoa grind, however, helped to temper any bullish impetus from the biggest jump in nearly two years in North America's grind.
July arabica coffee on ICE futures dropped 1 cent, or 0.7 percent, to close at $1.3740 per lb. The contract touched $1.3355 on April 15, the lowest level for the second-month contract since May 2010.
Dealers said the prospect of a large off-year crop in top producer Brazil this year was outweighing concerns about the spread of plant fungus roya in Central America.
"With a record off-cycle harvest approaching, we're fearing Brazil will let coffee go out the door at any price," said Cordier, noting roasters have held off buying amid expectations of the large crop.
July robusta coffee futures on Liffe settled down $7, or 0.4 percent, at $1,984 a tonne.
Vietnam's coffee exports this month are estimated to have fallen 34.6 percent from a year ago to 110,000 tonnes, or 1.83 million bags, the government's statistics office said.
<Center><b><i>Copyright Reuters, 2013</b></i><br></center>
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