June 20, 2019 / 11:20 AM / a month ago

SOFTS-Coffee extends gains thanks to weak dollar, sugar retreats

LONDON, June 20 (Reuters) - Arabica coffee prices on ICE rose for a second day on Thursday, extending their recovery from a recent three-week low amid a weaker dollar, while sugar prices fell for a fourth session.

COFFEE

* September arabica coffee rose 1.6 cents, or 1.6%, to 99.55 cents per lb by 1103 GMT, having hit a three-week low on Monday.

* A dealer said coffee has found support from a tightening in the July-September spread KC-1=R and a weaker dollar. He added, however, that sentiment remains bearish overall.

* The dollar was on track for its biggest two-day drop this year after the Federal Reserve signalled it was ready to cut interest rates as early as next month.

* A weak dollar makes dollar-priced commodities like coffee cheaper for holders of other currencies.

* Coffee plunged 5.3% last week amid renewed concerns about oversupply in top grower Brazil and a technical market structure that rewards sellers.

* September robusta coffee rose $21, or 1.5%, to $1,393 per tonne.

SUGAR

* July raw sugar fell 0.04 cents, or 0.3%, to 12.46 cents per lb. Prices hit a 1-1/2 month high on Friday but have been retreating this week.

* A dealer said substantial volumes of Thai sugar still need to be sold, adding producers will likely have to lower their prices, which would weigh on the sweetener.

* Sugar was supported in the first half of this month by dry weather in India, a top sugar grower, and surging corn prices .

* Rising corn prices raise corn-based ethanol prices in the United States, tempting Brazilian mills to produce and export more cane-based ethanol, at the expense of sugar.

* But in bearish news, a growing number of companies in Brazil, including Sao Martinho SA, are starting to produce ethanol from corn rather than cane.

* Also, India’s annual monsoon has hit some parts of Maharashtra, an official said, adding conditions are becoming favourable for rains to advance into southern India.

* August white sugar fell $0.80, or 0.2%, to $331.90 per tonne.

COCOA

* September London cocoa rose 10 pounds, or 0.5%, to 1,844 pounds per tonne.

* The contract hit an 11-month high last Wednesday as top growers Ivory Coast and Ghana announced plans to set a floor price for cocoa.

* In news, Ghana’s Cocobod will open its cocoa light crop purchases on Friday, maintaining the price it pays farmers at 7,600 cedis ($1,407) per tonne.

* September New York cocoa rose $8, or 0.3%, to $2,521 per tonne.

$1 = 0.7948 pounds Reporting by Maytaal Angel; Editing by Susan Fenton

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