Sugar steadies near 22-month high, coffee little changed

(Reuters) – Raw sugar futures on ICE held steady on Monday in sight of last week’s 22-month high, buoyed by expectations of tightening supplies, while coffee was little changed, supported by a poor robusta harvest in Brazil.

Cocoa edged up, underpinned by concerns over the impact of dry weather on mid crops in West Africa.

Raw sugar futures were little changed as the market took stock of U.S. data showing a new record net long position held by speculators.

Speculators hiked a bullish stance in raw sugar on ICE Futures U.S. in the week to May 17, bringing their net long position to record levels for a third straight week as prices hit fresh 1-1/2-year highs, U.S. government data showed on Friday.

On track to break a four-year losing streak, raw sugar prices are up 12 percent since the end of 2015 on expectations of a global deficit – the first in six years – as output in two leading growers Thailand and India dropped.

Carlos Mera, senior commodity analyst with Rabobank, said the sugar market’s attention was shifting to expectations of a good monsoon in number 2 producer India.

He referred to the possibility that a La Nina weather event could emerge later in the year.

“It (la Nina) makes it more likely for there to be a good monsoon,” he said.

July raw sugar was down 0.04 cent, or 0.2 percent, at 17.03 cents per lb at 1147 GMT, having risen as high as 17.29 cents on Friday, its loftiest since July 2014.

ICE August white sugar was down $1.0, or 0.2 percent, at $480.2 per tonne.

Coffee edged up, underpinned by concerns over a poor robusta crop in Brazil due to prolonged dry weather.

Mera said earlier concerns over dry weather in top robusta grower Vietnam were dissipating after recent rainfall.

“In Vietnam I don’t see any major problems (in crop development),” he said.

July robusta coffee was up $2, or 0.1 percent, at $1,662 per tonne, within sight of $1,707, the highest since August, touched on Tuesday.

ICE July arabica coffee was down 0.4 cent, or 0.3 percent, at $1.243 per lb, against a backdrop of ample good quality supplies flowing in from Brazil’s arabica harvest.

July New York cocoa was up $42, or 1.4 percent, at $2,954 per tonne, while July London cocoa traded up 38 pounds, or 1.8 percent, at 2,186 pounds per tonne. It fell on Thursday to $2,884, the lowest since April 13.