Raw sugar futures edged higher on Monday, extending gains on speculative short-covering and expectations for tighter nearby supply, while cocoa prices slipped on chart-based selling. March raw sugar was up 0.14 cents, or 1 percent, at 13.81 cents per lb by 1415 GMT, after climbing to 13.83 cents.
Prices were partly supported by short-covering from speculators buying back their bearish positions in the nearby month. Focus was on the March-May spread with the spot premium rising to a six-week high on Monday, indicating nearby demand as the spot contract nears expiry.
Dealers said this was partly due to expectations for less deliverable raw sugar amid reduced supplies from top grower Brazil and increased flows of Central American sugar to China. "The spread has strengthened mainly on what we suspect is fund and specs rolling of short positions - but also on trade buying, perhaps anticipating less deliverable sugar against (March) NY than normal," said Nick Penney, senior trader at Sucden Financial.
March white sugar rose $2.90, or 0.8 percent, to $357.60 a tonne. The contract expires on Tuesday, with open interest at 9,280 lots as of Friday's close, indicating a small delivery is likely.
Ukraine's exports of white beet sugar from September to January fell by about 39 percent from the same period a year earlier to 250,000 tonnes, sugar producers' union Ukrtsukor said on Monday, citing unfavourable market conditions. March New York cocoa fell $24, or 1.2 percent, to $2,036 a tonne.
Prices were undermined by chart-inspired selling in low volume, as the market ran into resistance around recent highs and the short-term moving average, dealers said. Speculators switched to a bullish stance in New York cocoa contracts on ICE futures US in the week to February 6 for their biggest net long position in 15 months.
Focus also remained on the broadly bearish fundamental picture, amid forecasts for a second consecutive global surplus this season. May London cocoa was down 15 pounds, or 1 percent, at 1,473 pounds a tonne.
March arabica coffee was up 0.45 cents, or 0.4 percent, at $1.2230 per lb. March robusta coffee rose $7, or 0.4 percent, to $1,800 a tonne.
Costa Rica will lift a 30-year ban on planting robusta trees, which are more resistant to disease and rising temperatures than arabica, the minister of agriculture said on Friday.
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