Raw sugar prices hit one-week low, cocoa surges

Raw sugar prices hit a one-week low on Monday as oil prices fell and traders squared positions after prices rose 0.4 percent last week, while cocoa surged on short covering.
May raw sugar was down 0.16 cent, or 1.3 percent, to 12.41 cents per lb at 1438 GMT, having hit its lowest since March 15 at 12.33 cents.
Oil prices slipped on Monday, prompting funds to sell biofuel ethanol. Falling ethanol prices tend to weigh on sugar by prompting Brazilian cane mills to produce more of the sweetener rather than the biofuel.
Rabobank analyst Carlos Mera said ethanol stocks had been rising in Brazil, adding that once the cane harvest starts in April, this could weigh on prices of the biofuel, prompting sharp falls in sugar. "You'll have a double whammy of low ethanol (prices) combined with very low sugar prices," he said.
Speculators reduced their net short position on ICE US raw sugar futures by 12,027 contracts to 123,183 contracts in the week to March 19.
Farmers in western Europe have begun sugar beet planting, with signs indicating a decline in area.
Brazilian mills in the main cane belt, however, are expected to produce 7 percent more sugar in the new season.
May white sugar fell $1.5, or 0.45 percent, to $333.90 per tonne.
May New York cocoa rose $60, or 2.78 percent, to $2,219 per tonne.
Speculators lifted their net short position in ICE US cocoa futures to a 1-1/2 year high in the week to March 19.
A dealer said rising open interest since March 19 seemed to indicate speculators had added even more short positions, prompting some to hedge their bets and cover their shorts.
Above-average rainfall in Ivory Coast's key cocoa regions last week will boost the April-September mid-crop, but dry spells in the country's centre have raised concerns, farmers said.
May London cocoa rose 39 pounds, or 2.40 percent, to 1,667 pounds per tonne.
May arabica coffee rose 0.5 cent, or 0.53 percent, to 94.40 cents per lb after setting a fresh contract low of 92.60 cents.
The monthly contract shed 3.9 percent last week and has posted declines in seven of the past eight weeks.
Coffee prices have collapsed on excess supplies, with top grower Brazil forecast to have a massive 2019-20 crop.
Speculators reduced their bearish stance on ICE US arabica coffee futures in the week to March 19, after five straight weeks in which they increased their bearish position.
May robusta coffee fell $2, or 0.13 percent, to $1,496 per tonne.