* Sugar market digests October delivery, Dreyfus deal
* Impact of rains on Brazil's cane crop also boosts sugar
* Arabica up after weaker dollar
* Cocoa down after Reuters story on Cargil-ADM deal
By Barani Krishnan and David Brough
NEW YORK/LONDON, Oct 2 U.S. raw sugar futures
hit 6-1/2 month highs on Wednesday as traders and investors
focused for a second day on the biggest sugar purchase in more
than two decades by a single merchant, Louis Dreyfus.
Concerns over the impact of rains on Brazil's cane output
also underpinned the sentiment in raw sugar.
Arabica coffee rose in New York after a weaker dollar
boosted commodities priced in the U.S. currency. The
19-commodity Thomson Reuters-Jefferies CRB index was
up nearly 1 percent as the dollar hit an eight-month low against
Cocoa fell slightly in both London and New York trade after
an exclusive story by Reuters that Cargill was in the final
stages of a deal to buy Archer Daniels Midland's cocoa business.
Raw sugar for March settled up 0.19 cent, or 1
percent, at 18.51 cents a lb on ICE Futures U.S. The session
high was 18.56 cents, which marked a 6-1/2 month peak.
The gains followed a 1 percent rally on Tuesday which was
sparked by the largest delivery of raw sugar in at least 24
years against ICE's expired October contract.
Term Commodities, an unit of Louis Dreyfus, was
the sole recipient of the 29,344 lots delivered against the
expired contract, which amounted to 1.49 million tonnes of
"It is possible March could reach 19 cents, which is a far
cry from the 16-cent lows seen earlier in the year," said Nick
Penney at brokers Sucden Financial Sugar in London.
"We are waiting to see if the demand is still there at these
Dealers said they were watching out for vessel nominations
that would likely follow from the delivery to Louis Dreyfus.
Many were also studying the impact of rains in Brazil and
how that was affecting the world's largest sugar producer.
Traders said Louis Dreyfus would be in a stronger position to
find buyers for the sugar if the Brazilian rains slow down
In white sugar, the December contract on London's Liffe
closed up $3.50, or 0.7 percent, at $492.20 a tonne.
COFFEE UP, COCOA DOWN
In coffee, prices for both arabica and robusta rose.
Arabica's December contract on ICE settled up 0.35
cent, or 0.3 percent, at $1.1445 per lb.
The front-month arabica contract had dipped to $1.1105 on
Sept. 17, a more than four-year low, pressured by a huge
"off-year" harvest in No. 1 producer Brazil.
The rains now in Brazil also augured well for development of
the "on-year" 2014/15 crop, traders said.
"I could see more leeway to the downside (in arabica
prices)," said Stefan Uhlenbrock, senior soft commodities
analyst at F.O. Licht.
Liffe's robusta coffee for January rose $19, or 1
percent, to close at $1,662 a tonne. The benchmark second month
contract had slumped to $1,596 on Friday, a three-year low.
Robusta prices rebounded even as dealers expected production
in top grower Vietnam to gather pace this week, heading toward
another large crop.
In cocoa, ICE's December contract slipped $2 to
$2,632 per tonne at the close. The front month climbed to $2,657
on Sept. 19, a one-year high.
December cocoa on Liffe settled down 4 pounds to
1,687 pounds a tonne.
Prices dropped as market participants digested Cargill's
pending purchase of Archer Daniel Midland's cocoa business. The
deal is expected to create a company big enough to compete with
Zurich-based Barry Callebaut, the world's largest maker
of industrial chocolate products.
"It's too much consolidation. It's not good for the market
in general," a veteran industry source said, commenting on the
"When you have that much of a concentration in the market,
it's tough for independent trading companies to make the money
they should make. They have one buyer less, so they'll have to
beg Barry Callebaut and Cargill to buy their beans."
In industry news, top cocoa producer Ivory Coast announced
on Wednesday it has raised the guaranteed minimum farmgate price
for cocoa to 750 CFA francs ($1.55) per kilogram for the 2013/14
main crop, from 725 CFA francs in the last season.