NEW YORK/LONDON: ICE cocoa climbed to its highest in more than two years on Monday on buying in reaction to a strong technical outlook and to deficit expectations, while raw sugar futures fell to a two-month low as mills in No. 2 producer India began crushing after a month-long delay.
Liffe robusta coffee futures neared a near seven-week peak as producers in top grower Vietnam held back supplies.
The second-month March cocoa contract on ICE Futures U.S. settled up $25, or 0.9 percent, at $2,813 a tonne.
The benchmark contract rallied to a more than two-year high of $2,844 ahead of the International Cocoa Organization (ICCO)'s release of its supply and demand estimates for the 2012/13 year that ended Sept. 30.
A big upward revision brought ICCO's global deficit estimate to 160,000 tonnes from its previous 52,000 tonnes and in line with overall trade estimates of tight supplies.
"We're in a bull market. This gives the bulls more to feed off," said Nick Gentile, senior partner of commodity trading consultancy Atlantic Capital Advisors.
Even so, cocoa arrivals at ports in Ivory Coast by Dec. 1 reached about 496,000 tonnes since the start of the season in October, exporters estimated on Monday, up from 350,000 tonnes in the same period last year and a sign of increased exports in the world's top producer.
Recent wet weather in Ivory Coast had stoked fears about harvest disruptions, but sunny spells last week cast a rosier outlook on this year's crop.
March cocoa on Liffe closed up 14 pounds, or 0.8 percent, at 1,759 pounds per tonne, near last month's more than two-year high of 1,788 pounds.
ICE RAW SUGAR SINKS UNDER SUPPORT
The spot March raw sugar contract on ICE dropped 0.18 cent, or 1 percent, to finish at 16.97 cents a lb.
Sugar's losses gathered pace after prices slid past support at 17 cents a lb to set a two-month low of 16.92 cents a lb.
Under pressure from subdued demand and huge global supplies, the spot contract has given back most of it gains that began in July and took it to a one-year high above 20 cents a lb on Oct. 18.
Most of India's cane mills began crushing following a month-long standoff between farmers and millers in key growing regions over government-set cane prices.
Even with the delay, India is expected to produce a surplus and to export 3 million to 4 million tonnes of sugar this year, putting the world's top consumer in competition for export business with other major sugar producers, which are also expected to see bumper production.
"We are fast approaching a situation in which there will be many competing for export markets," said Nick Penney, a senior trader at Sucden Financial.
With a 14-day relative strength index at 23.4, the front-month ICE contract was the most technically oversold it has been since June 2012, exchange data compiled by Reuters showed.
March white sugar futures on Liffe tumbled $9.00, or 1.9 percent, to close at $455.00 per tonne after sinking to a contract low of $454.40.
In coffee, the Liffe January robusta contract rose $16, almost 1 percent, to finish at $1,658 a tonne after hitting $1,670, the highest for the spot contract since mid-October.
Dealers said the market should push higher, driven by speculators and by farmers in top producer Vietnam unwilling to sell at low prices.
London's gains lifted New York coffee prices early in the session before prices met resistance near the $1.12 per lb level.
ICE March arabica coffee futures closed down 0.95 cent, or 0.9 percent, at $1.099 per lb.
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