* Rains forecast in Brazil sugar areas
* Larger-than-expected Vietnam coffee crop surprises trade
* ICCO expects global 2012/13 deficit
(Updates with closing prices for sugar and arabica)
By Marcy Nicholson and Sarah McFarlane
NEW YORK/LONDON, Sept 21 (Reuters) – ICE raw sugar futures
climbed on Friday, boosted by wet weather disrupting the tail
end of the harvest in top grower Brazil, while coffee futures
also jumped, sharply raising arabica’s premium over robusta.
Cocoa markets traded mixed.
Sugar futures gained after wet weather in some of Brazil’s
key cane-growing areas, with more rain forecast in the coming
days.
“People are assessing how much crushing has been lost in the
last 24 hours and how much will be lost over the next 72 hours,
as rain is forecast to hit the central Sao Paulo cane-growing
regions around Aracatuba,” a London-based analyst said.
“The dry period is over and now we’re starting to see the
rain, and it’s just a matter of how many days’ rain we see over
the balance of the crop” as to whether current sugar production
estimates will be met, the analyst said.
ICE October raw sugar futures gained 0.17 cent, or
0.9 percent, to settle at 19.38 cents per lb, but closed the
week down 2.7 percent. The anticipated global surplus kept the
market near a two-year low of 18.81 cents, touched on Sept. 6.
March raws ended the day up 0.16 cent, or 0.8
percent, at 20.07 cents per lb.
“We expect resistance in March at 20.50 and heavier at 21
cents as producer hedging kicks in at these levels,” Nick Penney
at brokerage Sucden Financial said.
Michael McDougall, a senior vice president for brokerage
Newedge USA, said the first significant rain in months on
Thursday caused 40 to 50 percent of the mills in Brazil’s Sao
Paulo and Parana regions to shut down.
“However, since rain is expected to be greater than normal
for the next two weeks, we expect to see more stoppages, and
those that had projected their crush numbers thinking rain was
not going to return this year will have to re-work those final
numbers again,” McDougall said in a daily report.
Brazil’s sugar industry association Unica cut its forecast
for 2012-13 sugar and ethanol output on Thursday but said it
expects a larger overall cane crop thanks to rains earlier this
year.
December white sugar on Liffe rose $3.90, or 0.7
percent, to $560.90 per tonne.
COFFEE FIRM
Arabica coffee futures continued consolidating on both sides
of their 100-day moving average after last week’s short-covering
rally, with dealers noting the large Brazil crop was likely to
cap gains.
ICE December arabica coffee futures rose by 4.70
cents, or 2.8 percent, to end at $1.7330 per lb, above the
100-day moving average at $1.7290. The move lifted their premium
over robusta futures to nearly 81 cents per lb, after falling
sharply in the previous session to roughly 76 cents per lb.
The market ignored soaring certified arabica stocks, which
climbed to nearly 2.1 million bags on Thursday, the highest
level in more than two years, which dealers said reflected weak
demand on the physical market.
NYSE Liffe certified robusta stocks dropped below 130,000
tonnes by Sept. 17.
November robusta coffee futures closed up $42, or
2.1 percent, at $2,083 a tonne.
“Over the last couple of months everyone’s been upgrading
their Vietnam crop for last year (2011/12),” a London-based
broker said. “Instead of having a 22-23 million bag crop, the
trade are now looking at 26-28 million bags.”
A group of Vietnam’s top coffee exporters has recommended
beans from the 2012/13 crop be priced at a $30 discount to
London futures and has asked the government for permission to
stockpile 300,000 tonnes to support prices.
Cocoa prices went in both directions as they remained below
multi-month highs reached earlier in September, with weak demand
in developed markets keeping market participation light.
ICE December cocoa futures inched up $2 to settle at
$2,521 a tonne. Liffe December cocoa ended down 9 pounds
at 1,626 pounds per tonne.
International Cocoa Organization statistician Laurent
Pipitone said ICCO expects a global cocoa deficit in 2012/13 as
a lack of rain in West Africa curtails supply..
“On the demand side, consumption has not been very good,
especially in developed countries, but we still have growth in
emerging markets, so overall we expect demand growth will be
positive in 2012/13,” Pipitone said.
Slowing chocolate demand and poor cocoa processing margins
are triggering the resale of cocoa beans by major processors,
European cocoa traders said.
(Additional reporting by Nigel Hunt in London; Editing by
Alison Birrane, John Wallace and Dale Hudson)
(Marcy.Nicholson@thomsonreuters.com, +1 646 223 6043; Reuters
Messaging
Marcy.Nicholson.ThomsonReuters.com@reuters.net
)
