London sugar and coffee higher

Cocoa futures fell in a slight correction to last week's contract high in London and 14-month peaks in New York, easing along with other commodity markets. Sugar futures rose, however, buoyed by bullish fundamentals while arabica coffee prices advanced on fund buying.
October white sugar at London ended $5.70 higher at $544.20 per tonne. Market supported by strong demand from No 1 consumer India and weak supplies from top growers India and Brazil. December cocoa at London trade ended 9 pounds lower at 1,937 pounds per tonne, in a slight correction, having set a contract high of 1,963 pounds on Friday.
The market is supported by a bullish outlook after New York's December contract recently broke through key resistance at $3,000 a tonne. While November robusta coffee closed $17 higher at $1,505 per tonne, trading in a recent range and gaining some support from New York's December arabica which rose nearly 5 percent on fund buying. Barclays Capital analyst Nicholas Snowdon said the outlook for cocoa remained strong despite the slight setback.
"We expect cocoa (New York's December contract) to have an increasing number of forays above $3,000 a tonne," Snowdon said, noting that the market may start pricing in improved grindings ahead of the fourth quarter, or 2010 when they are expected. "There's an increasing level of confidence in the recovery of the global economy out of recession and the pace of the recovery is a key supportive factor in cocoa prices," Snowdon said.
Another contributing factor is concern over the quality and size of the crop from top-grower Ivory Coast. New York's December contract touched an intraday high of $3,110 per tonne on Friday and one trader said he could see it pulling back to $2,600 per tonne in the short term. "In the medium to longer term I think we'll probably go higher," he said.
Sugar futures edged higher after falling in earlier trade and Snowdon said that the sweetener is particularly resilient to macro-economic moves. "The specific dynamics of sugar are powerful enough to offset any top-down macro-economic influence," Snowdon said. He said that demand from top-consumer India continues to grow and that the country will have to import as much as 7-8 million tonnes over the next year.