* Unica: Brazil's center-south late May sugar output falls
* Brazil's mills allocate 41.8 pct cane to sugar, 58.2 pct
* Favorable WAfrica crop arrivals, weather weigh on cocoa
* Robusta coffee at lowest in 18 mos for benchmark contract
(Rewrites; Adds Unica data, comment, updates with closing
By Carole Vaporean
NEW YORK, June 11 ICE raw sugar futures pared
some early losses on Tuesday after a much-awaited report from
Brazil's cane industry group showed a sharp drop in sugar
crushings and that mills favored ethanol production over cane
sugar during the second half of May.
But sugar prices failed to rally when Unica also said it
expected the fast pace of cane crushings in the world's largest
producer to resume in June with the return of dry weather.
"The weather has turned drier again and if that continues to
be the case, we should see a resumption of the strong pace we've
been seeing all year long," said Jack Scoville, vice president
of The Price Futures Group in Chicago.
"This (drop in sugar output) would appear to be a temporary
hiccup and the market appears to be taking it that way," he
added, noting that sugar prices had returned to pre-report lows.
Elsewhere, arabica coffee dropped under pressure from
surplus supply, and ICE cocoa was down against a backdrop of
favorable crop weather and crop arrivals in West Africa.
July raw sugar futures ended on ICE down 0.09 cent at
16.29 cents a lb, having earlier fallen to 16.18 cents, the
lowest for the front month since July 2010 in anticipation of
higher sugar crushings in Brazil.
Late May rains and a shift by Brazilian cane mills to
increased ethanol production dragged on sugar output in the main
center-south cane region, the industry association said in its
It said sugar output in the cane region fell 11 percent in
the second half of May, and that mills allocated 41.8 percent of
their cane to sugar and 58.2 percent to ethanol in late May.
Some traders said beforehand that they wanted to see sugar
at well below 42 percent to prove millers were favoring ethanol.
"Everyone's been saying ethanol prices are better. So it
could continue to be a trend that we see more ethanol produced
at least until the ethanol price breaks," Scoville said.
August white sugar on Liffe closed down $2.80, or
0.58 percent, at $476.40 a tonne in robust volume.
July arabica coffee futures on ICE lost 1.05 cent, or
0.82 percent, to close at $1.2770 per lb.
The contract fell to $1.2505 per lb on May 31, the lowest
level for the front month since September 2009, driven down by
Despite Monday's gains in coffee, dealers said arabica
prices remained pressured by expectations of a huge off-year
crop in top grower Brazil.
September robusta coffee futures on Liffe fell $35,
or 1.92 percent, to settle at $1,822 a tonne, having earlier
fallen to a contract low at $1,820 and the lowest level since
January 2012 for a second-month contract.
Robusta weakened under the weight of plentiful supplies from
top producer Vietnam and lower prices in the arabicas market.
Cocoa on ICE edged lower on signs of healthy supply, with
September finishing down $4 at $2,364 a tonne. Late
volume came to 20,613 lots.
Cocoa arrivals at ports in top grower Ivory Coast reached
around 1,260,000 tonnes by June 9, since the start of the season
in October, exporters estimated on Monday, up from 1,190,000
tonnes in the same period of the previous season.
"Solid cocoa arrivals and good weather have reinforced the
idea that the supply side is not problematic," said Eric Sivry,
head of agri options brokerage at Marex Spectron.
Liffe September cocoa dipped 5 pounds, or 0.32
percent, to end at 1,554 pounds a tonne in volume of 7,996 lots.
(Reporting by David Brough in London and Carole Vaporean in New
York; editing by William Hardy, Marguerita Choy and Maureen