(Reuters) – Raw sugar futures on ICE edged up to equal the prior session’s 5-1/2 month high on Tuesday as funds scaled back short positions, although the rise was slowed by producer selling.
SUGAR
* March raw sugar was up 0.03 cents, or 0.2 percent, at 15.16 cents per lb by 1210 GMT after equalling Monday’s 5-1/2 month peak for the front month of 15.18 cents.
* Dealers said the recent run-up in prices has been driven partly by a rise in energy prices which is leading to a switch in Brazil to using more cane to produce ethanol at the expense of sugar.
* Dealers said the switch would curb sugar production in Brazil and reduce the size of a widely anticipated global surplus in the 2017/18 season.
* “We are not talking about the disappearance of the surplus but we are talking about a reduction (in its size),” one London dealer said.
* Dealers said the market was, however, struggling to overcome resistance around the March contract’s peak in September of 15.20 cents and a break above that level could trigger a fresh wave of fund short covering.
* Funds have been scaling back their net short positions during the rise in prices.
* March white sugar rose by $2.00, or 0.5 percent, to $396.00 a tonne.
* The December contract, which expires on Wednesday, saw its premium to March widen slightly.
* Brazil and Central American sugar is likely to be tendered and there could also be some supplies from the European Union and Ukraine, dealers said.
COCOA
* March New York cocoa was off $5, or 0.2 percent, at $2,196 a tonne, drifting further away from last week’s 10-month high of $2,226.
* Most of Ivory Coast’s main cocoa growing regions recorded above average rainfall and regular sunny spells last week, conditions that farmers on Monday said should help bolster the crop from early next year.
* March London cocoa was off 4 pounds, or 0.2 percent, at 1,661 pounds a tonne.
* Ivory Coast plans to end illegal cocoa farming in national parks and protected forests within five years, the minister for water and forests, Alain Richard Donwahi, said on Monday.
COFFEE
* March arabica coffee fell by 0.20 cents, or 0.2 percent, to $1.2740 per lb.
* January robusta coffee was down $3, or 0.2 percent, at $1,821 a tonne.
