Raw sugar futures sprang higher on Monday, buoyed by lower output forecasts in India and steady consumer buying as the market sought to establish the groundwork for another challenge of 30-year highs. Arabica coffee futures also rose as high-quality beans remained in short supply, while cocoa dipped slightly on technical factors, falling further from one-year peaks.
Business in all three markets were running slightly above their respective 30-day norms, Thomson Reuters preliminary data showed. The key March raw sugar contract on ICE Futures US went up 0.04 cent to settle at 32.68 cents per lb. "Sugar is recovering from its momentary swoon," said Sterling Smith, senior analyst for brokerage Country Hedging Inc in St. Paul, Minnesota.
Markets were also boosted after an Indian state cut its outlook for the country's 2010/11 sugar crop to 24 million tonnes, below government estimates. Coffee futures were higher as better quality beans continued to be hard to find. Smith said the arabica market is still showing "plenty of upside." Arabica coffee also saw some position rolling out of March ahead of first notice day February 17, into May. The market moved up as tight supplies propped up prices, but hesitated below last week's 13-1/2-year high at $2.536, basis March. New York's March arabica coffee futures increased 0.45 cent to close at $2.4975 per lb. The May cocoa contract in New York declined $25 to finish at $3,239 per tonne.
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