SOFTS-Raw Sugar Bounces From 2-1/2 Month Low, Arabica Also Up

(Reuters) –  Raw sugar futures rose on Wednesday, boosted from a 2-1/2 month low by short-covering and signs that there may be less supply from Brazil going forward, while arabica coffee steadied above 5-1/2 month lows.

SUGAR

* March raw sugar was up 0.12 cents, or 1.2 percent, at 13.94 cents per lb by 1215 GMT.

* Prices fell to their weakest since late September in the prior session, pressured by a weak Brazilian real and souring technicals.

* Dealers said the market was in technically over-sold territory, which had inspired speculative short-covering on Wednesday.

* A strengthening in the March position relative to the May contract was also supportive as it signalled potentially tighter near-by deliverable supplies, dealers said.

* “This may be suggesting that the trade believe supplies mAdd Neway be tighter than expected out of Brazil early next harvest… as producers concentrate on ethanol production,” Nick Penney, senior trader at Sucden Financial, said in a note.

* Brazilian senators passed on Tuesday a bill proposing sharp increases in the use of biofuels such as ethanol and biodiesel in the country in coming years.

* Meanwhile, Chinese sugar refineries are planning to lobby Beijing to increase out-of-quota sugar imports next year, according to three sources familiar with the matter, after the government took several steps to curb shipments this year.

* March white sugar was up $4.10, or 1.1 percent, at $366.00 a tonne.

COFFEE

* March arabica coffee was up 0.85 cents, or 0.7 percent, at $1.193 per lb, having hit a 5-1/2 month low in the prior session.

* January robusta coffee was up $19, or 1.1 percent, at $1,707 a tonne.

* Uganda’s coffee exports surged 82 percent in October, compared with the same month a year earlier, a report by the industry regulator showed on Wednesday.

* Meanwhile Brazil exported 2.56 million 60-kg bags of green coffee in November, 13 percent less than in the same month a year earlier.

COCOA

* March London cocoa was down 6 pounds, or 0.4 percent, at 1,398 pounds a tonne.

* A total of 14,980 tonnes of cocoa has been tendered against the ICE December London cocoa contract, exchange data showed on Wednesday.

* The bulk of the cocoa was from Cameroon, confirming dealer concerns. Worries about receiving poor quality cocoa from origins like Cameroon appeared to sap demand for the December contract, despite a dramatic widening in discounts.

* March New York cocoa was up $3, or 0.2 percent, at $1,870 a tonne.