May 22, 2020 / 10:10 AM / 5 days ago

SOFTS-Raw sugar back below 11 cents as crude tumbles; coffee steadies

LONDON, May 22 (Reuters) - Raw sugar futures on ICE fell sharply on Friday after hitting near two month highs in the previous session, with oil prices sliding on rising U.S.-China tensions.

Falling energy prices tempt cane mills in top producer Brazil to ramp up sugar output at the expense of cane-based ethanol fuel.

SUGAR

* July raw sugar was down 0.2 cents, or 1.6%, at 10.80 cents per lb by 0955 GMT, after peaking at 11.32 cents on Thursday, its highest since late March.

* “For most, prices past 11 cents made them somewhat uncomfortable. We largely agree but would (note) that traders and consumers seem to have greater willingness to hold more inventory,” said Commonwealth Bank of Australia.

* Sugar market participants worried about potential disruption to Brazilian supplies are topping up inventories. Brazil is fast approaching Russia to become the world’s No. 2 COVID-19 hot spot behind the United States.

* August white sugar was up $2.40, or 0.7%, at $362.90 per tonne.

COFFEE

* July arabica coffee dipped 0.10 cents, or 0.1%, to $1.0465 per lb.

* Brazilian coffee growers picked 13% of expected 2020 production by May 19, a slower pace than in the previous year and below the historical average.

* Coffee is looking for direction, with potential supply disruptions weighed against concerns over demand, with many coffee shops around the world still closed due to coronavirus lockdowns, or opened only partially.

* July robusta coffee was flat at $1,189 a tonne.

COCOA

* July New York cocoa was down $11, or 0.5%, at $2,329 a tonne.

* “Cocoa will remain a relative outperformer (in softs) in the coming months due to production concerns in Africa. Consumer demand could soften in 2021 (however) due to the impact of Covid-19,” said Fitch Solutions in a report.

* July London cocoa fell 3 pounds, or 0.2%, to 1,942 pounds a tonne​. (Editing by Elaine Hardcastle)

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