April 24, 2019 / 12:21 PM / 5 months ago

SOFTS-Raw sugar prices weaken, remain range-bound

LONDON, April 24 (Reuters) - Raw sugar futures were slightly lower on Wednesday as the market drifted back down towards the middle of its recent trading band while cocoa prices also weakened.

SUGAR

* July raw sugar fell 0.07 cents, or 0.5 percent, to 12.83 cents per lb by 1156 GMT after the market remained locked in a narrow trading band with solid support below 12.50 cents but heavy resistance above 13 cents.

* Dealers noted both ends of the range were tested last week and prices now appear to have drifted back towards the middle of the band.

* “Once more sugar keeps trying to break out of its range and keeps failing at both extremes. The reason is that ethanol is pulling sugar up and sugar fundamentals are pulling it down,” Marex Spectron analyst Robin Shaw said.

* Recent strength in energy markets has increased the incentive to use Brazilian cane to make biofuel ethanol rather than sugar but there remains concern about high stocks, particularly in India.

* Dealers said the market may remain rangebound in the run-up to the expiry of the May contract on April 30.

* “The longer prices continue to trade in the range, the more exciting the move could be when it does eventually break out,” James Liddiard of consultants Agrilion said.

* Dealers noted India remained a key focus with concern about dry weather and low water levels in Maharashtra.

* August white sugar was down $0.30, or 0.1 percent, at $337.90 a tonne.

* Associated British Foods, parent of British Sugar, said almost zero first half profit from sugar represented the “low water mark” for the business, forecasting an improved performance as prices pick up.

COCOA

* July London cocoa fell 11 pounds, or 0.6 percent, to 1,720 pounds per tonne,

* Dealers said the market was on track to fall for a third consecutive session after a short-covering rally which saw the July contract climb to a 3-1/2 month peak of 1,786 pounds on April 18 ran out of steam.

* July New York cocoa was down $14, or 0.6 percent, at $2,278 per tonne.

COFFEE

* July arabica coffee rose 0.40 cents, or 0.4 percent, to 93.65 cents per lb and the market extended a modest rebound from last week’s 13-1/2 year low of 89.00 cents.

* Dealers said a generally favourable outlook for the harvest in top grower Brazil should, however, limit the scope of the recovery in prices.

* July robusta coffee rose $4, or 0.3 percent, to $1,403 a tonne. (Reporting by Nigel Hunt; Editing by Kirsten Donovan)

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