December 18, 2018 / 6:57 PM / 6 months ago

SOFTS-Raw sugar drops to 2-1/2-month low as oil plunges

 (Recasts with updated prices, comments, ICE data; adds NEW YORK
to dateline)
    NEW YORK/LONDON, Dec 18 (Reuters) - Raw sugar futures on ICE
fell to their lowest levels since early October, dragged down by
losses in crude oil, while arabica coffee touched a three-month
low as the market struggled to absorb surplus supplies.    
    * March raw sugar        settled down 0.19 cent, or 1.5
percent, at 12.30 cents per lb. after dipping to a low of 12.26
    * Sugar continued to be heavily influenced by energy
markets, dealers said.
    * Oil prices tumbled on Tuesday after reports of swelling
inventories and forecasts that record U.S. and Russian output
will hit a market that may see weaker demand if global growth
deteriorates as many expect.      
    * Lower energy prices diminish the competitiveness of
ethanol in top grower Brazil, bolstering concerns that mills may
switch more production from the biofuel back to sugar.
    * "The sugar market is worried by anything that makes
ethanol less attractive, and so sugar more attractive, to
Brazilian cane millers," Commonwealth Bank of Australia analyst
Tobin Gorey said in a market note.
    * March white sugar         settled down $3.70, or 1.1
percent, at $336 per tonne.
    * March arabica coffee        settled down 0.7 cent, or 0.7
percent, at 99.40 cents per lb. after falling to a three-month
low of 99.20 cents.
    * Prices have been weighed down by plentiful global supplies
following this year's record crop in top grower Brazil, dealers
    * Brazil, the world's largest exporter, produced a record
61.65 million coffee bags in 2018, official data showed.
    * Total open interest in arabica rose on Monday for the 12th
straight session to 267,707 lots, the highest since early
November, ICE data show. 
    * "The funds, the systems that like to be short coffee are
piling back in," said one U.S. trader. 
    * March robusta coffee         settled up $9, or 0.6
percent, at $1,487 per tonne.
    * March London cocoa         settled up 28 pounds, or 1.7
percent, at 1,685 pounds per tonne.
    * Dry winds and below-average rainfall in most of Ivory
Coast's cocoa-growing regions last week could jeopardize the
development of the last stage of the October-to-March main crop,
farmers said on Monday.             
    * March New York cocoa        settled up $41, or 1.8
percent, at $2,271 per tonne.
    * Prices rose in post-settlement trade to reach $2,312, the
highest for the front month since Nov. 8. 
    * "The move above $2,300 is a good pivot point to move
higher," said Peter Mooses, senior market strategist at RJO
Futures in Chicago.

 (Reporting by Ayenat Mersie in New York and Nigel Hunt in
London; editing by David Goodman and Tom Brown)
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