August 13, 2018 / 8:06 PM / a month ago

SOFTS-Raw sugar drops to three-year low, arabica also weakens

(Recasts with updated market comment, prices; adds NEW YORK to dateline)

NEW YORK/LONDON, Aug 13 (Reuters) - ICE raw sugar hit a three-year low on Monday and arabica coffee also weakened, both under pressure from a weakening Brazilian real amid a broad-based decline in commodity markets as investors sought safe havens due to the Turkish lira’s crash.

Cocoa on ICE Futures U.S. rose.

SUGAR

* Front-month raw sugar settled down 0.24 cent, or 2.28 percent, at 10.3 cents per lb, after hitting a three-year low of 10.21 cents.

* “The real isn’t helping,” said a U.S. trader.

* The weaker Brazilian real tends to encourage selling of dollar-traded commodities, as it makes them more valuable relative to the local currency. Brazil is the world’s top grower of both sugar and coffee.

* Dealers said supplies remained ample despite a decline in production in Centre-South Brazil and the potential for drought to dent output in the European Union.

* “While drought in Europe ... and a much lower CS Brazil sugar output possibly reduce the supply burden in future, the absolute level of stocks remains a major problem for sugar,” analysts Green Pool said in a market update.

* October white sugar settled down $4.90, or 1.55 percent, at $310.80 per tonne.

COFFEE

* December arabica coffee settled down 0.75 cent, or 0.68 percent, at $1.093 per lb after falling to $1.0745, a three-week trough and a contract low for December.

* The strong pace of exports from Brazil was keeping the market on the defensive, dealers said.

* The premium on coffee in Colombia, the world’s biggest grower of washed arabica beans, has shot to its highest in over five years after benchmark futures fell below the country’s cost of production and supplies tightened.

* September robusta coffee settled down $7, or 0.42 percent, at $1,667 per tonne.

COCOA

* December New York cocoa settled up $30, or 1.42 percent, at $2,148 per tonne.

* Dealers said the market was continuing to consolidate after a slide in prices during the second half of July driven by fund long liquidation.

* Speculators switched to a bearish stance on cocoa futures and options on ICE Futures U.S. in the most recent reporting week, government data showed on Friday after the market close.

* December London cocoa eased 5 pounds, or 0.31 percent, to finish at 1,604 pounds per tonne.

* Sunny spells last week in most of Ivory Coast’s cocoa growing regions boosted the development of the forthcoming cocoa main crop even as rains remained below average, farmers and agronomists said on Monday. (Reporting by Chris Prentice in New York and Nigel Hunt in London; Editing by Mark Potter and Tom Brown)

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