January 17, 2019 / 7:09 PM / 5 months ago

SOFTS-Raw sugar drops from two-month peak on weaker oil, Brazil currency

 (Recasts with updated prices and comment; adds NEW YORK to
dateline)
    NEW YORK/LONDON, Jan 17 (Reuters) - Raw sugar futures on ICE
fell on Thursday, pulling away from the previous day's more than
two-month high, as weakness in energy markets and Brazil's
currency dragged prices lower. 
       
    SUGAR
    * March raw sugar        settled down 0.32 cent, or 2.4
percent, at 12.85 cents per lb. 
    * Prices peaked at 13.27 cents the previous session, their
highest since Nov. 5, boosted by broader markets and speculative
short-covering. 
    * The market pulled back on Thursday, with dealers pointing
to waning speculative buying interest against a backdrop of
weaker oil prices.      
    * Weaker energy prices undermine the competitiveness of
ethanol in Brazil, bolstering worries that mills in the top
grower might switch more production back to sugar rather than
the biofuel. 
    * Dealers were watching support at 12.72 cents per lb,
Tuesday's low. 
    * "The ethanol parity will remain very important throughout
the (2019/20) season," said Carlos Mera, senior commodity
analyst at Rabobank. "So, therefore, sugar prices and energy
prices should remain correlated."
    * A weaker Brazilian currency also weighed on prices,
dealers said. A weaker real encourages producer selling by
boosting local returns on dollar-traded commodities.       
    * March white sugar         settled down $5.30, or 1.5
percent, at $348.5 per tonne.
    * Brazil's center-south region will produce 30.2 million
tonnes of sugar in the 2019/20 season, about 14 percent more
than it did in the previous crop, INTL FCStone said.
            
    
    COFFEE
    * March arabica coffee        remained unchanged from the
previous session at $1.024 per lb. 
    * "You have to be a little impressed that we were able to
close at unchanged considering the (Brazilian) real was very
weak," said one U.S. trader. 
    * Concerns about possible dry weather in Brazil have offered
some support to prices, dealers said.
    * March robusta coffee         settled down $4, or 0.3
percent, at $1,535 per tonne.
    * Brazil's 2019 coffee crop, an off year in the production
cycle, is seen at between 50.48 million bags and 54.48 million
bags, the government said Thursday.             

    COCOA
    * May New York cocoa        settled up $14, or 0.6 percent,
to $2,369 a tonne.
    * Prices got some support on short covering, dealers said.  
    * Market participants were awaiting North American
fourth-quarter grind data, due after the market close, for
demand signals. Expectations range are for a year-on-year gain
from 1 percent to 4.9 percent.  
    * Data this week showed European grindings rose 1.6 percent
in the fourth quarter from the same period in 2017.             
    * May London cocoa         settled down 4 pounds, or 0.2
percent, at 1,701 pounds a tonne.

 (Reporting by Ayenat Mersie in New York and Ana Ionova in
London; editing by Mark Potter and Tom Brown)
  
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