November 29, 2019 / 3:16 PM / 7 days ago

SOFTS-Raw sugar hits nine month high as funds cover shorts amid tighter supplies

(Recasts, updates prices, adds details)

LONDON, Nov 29 (Reuters) - Raw sugar prices hit their highest in nine months on Friday as funds covered short positions amid tightening supplies and producers scaled back selling.

SUGAR

* March raw sugar was up 0.12 cent, or 0.9%, to 12.91 cents per lb at 1450 GMT, having hit its highest since late February at 12.99.

* A large amount of producer selling has been done at current price levels, Sucden Financial said in a note, adding market sentiment was cautiously bullish.

* Producer selling of excess stocks had been keeping sugar range bound over the past few weeks, offsetting fund short covering amid forecasts for a widening market deficit.

* The weak Brazilian real has also weighed, but Sucden said it expected the currency to recover as Brazil’s central bank has pledged to defend it.

* A stronger real lowers the value of dollar-priced sugar in local currency terms, discouraging producer selling.

* French sugar group Tereos SA expects to report improved results in the second half of 2019/20, driven by higher prices for both sugar and ethanol, Chief Executive Alexis Duval said.

* March white sugar was up $1.10, or 0.3%, at $344.30 a tonne.

* Ukraine has produced around 1.26 million tonnes of white sugar this year, exceeding expectations.

COFFEE

* March arabica coffee futures fell 0.4 cents, or 0.3%, to $1.1805 per lb, edging away from a one-year high set early this week.

* Arabica has been supported in recent weeks by drier-than-normal weather conditions and by declines in ICE-certified stocks, which are near their lowest in around a year and a half.

* A global deficit is widely forecast in the 2019/20 season.

* Looking ahead, Rabobank said it expected Brazil would produce a record 66.7 million 60-kg bags next season. However, the bank believes the price outlook will remain positive as production will likely fall in other countries.

* March robusta rose $9, or 0.6%, to $1,406 a tonne, having hit its highest since early July on Tuesday.

* Coffee exports from Vietnam, the world’s top robusta producer, likely fell 14.6% in the first 11 months of this year.

COCOA

* March New York cocoa was flat at $2,597 per tonne, as the market’s retreat from a recent 1-1/2 year high petered out.

* March cocoa may stabilise around a support at $2,566 per tonne and retest a resistance at $2,683, technical signals indicate.

* March London cocoa was flat at 1,900 a tonne. (Reporting by Maytaal Angel; Editing by Louise Heavens and Mark Potter)

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