January 17, 2019 / 12:34 PM / 6 months ago

SOFTS-Raw sugar slips from two-month peak; arabica coffee firms

LONDON, Jan 17 (Reuters) - Raw sugar futures on ICE fell on Thursday, pulling away from the previous day’s two-month peak as energy markets dragged prices lower, while arabica coffee edged higher.

SUGAR

* March raw sugar was down a tenth of a cent, or 0.8 percent, at 13.07 cents per lb by 1220 GMT.

* Prices touched their highest since Nov. 5 in the previous session, 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 crude 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.

* “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.”

* Speculative activity also remained in focus, with participants trying to gauge fund positioning in the absence of Commitment of Trader reports because of the U.S. government shutdown.

* “There is less information in the market,” Mera said. “Funds could be building a huge position and we don’t know. So there’s a little bit of uncertainty coming from there.”

* March white sugar fell by $1.50, or 0.4 percent, to $352.30 a tonne.

* Stuart Kissen, head of sugar trading at Swiss commodities trader Glencore, has resigned, two sources familiar with the matter told Reuters.

COFFEE

* March arabica coffee rose 0.4 cents, or 0.4 percent, to $1.0280 per lb.

* March robusta coffee was down $5, or 0.3 percent, at $1,534 a tonne.

* Brazil’s 2019 coffee crop is seen at between 50.48 million bags and 54.48 million bags, compared with 61.65 million bags in 2018, as the off-year in arabica’s production cycle cuts overall output, the government said on Thursday.

* Vietnam’s coffee prices fell on Thursday ahead of a week-long Lunar New Year holiday early next month, while Indonesian premiums widened.

COCOA

* May London cocoa rose 2 pounds, or 0.1 percent, to 1,707 pounds a tonne

* May New York cocoa rose $5, or 0.2 percent, to $2,327 a tonne.

* Market participants were awaiting fourth-quarter grind data for North America, due after market close on Thursday, for signs of demand.

* Data showed this week that European grindings rose 1.6 percent from the same period last year. (Reporting by Ana Ionova Editing by David Goodman)

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