(Corrects paragraph 10 to "hydrous" instead of "anhydrous")
* Early gains drive technical buying in raw sugar -dealers
* ICE cocoa climbs to six-week high, hits resistance
* Arabica coffee buying picks up after London stocks fall
By Chris Prentice and Sarah McFarlane
NEW YORK/LONDON, July 25 ICE raw sugar posted
the biggest gains since early July on Thursday, recovering from
a recent three-year low, as rains in top grower Brazil spurred
trade buying and further technical gains, while ICE cocoa fell
back from the highest level since mid-June.
ICE arabica coffee futures rallied after exchange data
showed a steep drawdown in London robusta stocks.
The softening U.S. dollar provided support to
dollar-traded commodities, making them less expensive to holders
of other currencies.
October raw sugar on ICE Futures U.S. finished up
0.25 cent, or 1.5 percent, at 16.39 cents per lb, as gains early
in the session spurred technically driven buying, dealers said.
The initial buying may have been trade buying "as unexpected
rain overnight in Brazil has led to more shutdowns," Michael
McDougall, senior director of the Brazil desk for Newedge in New
York, said in a daily report.
Recent heavy rains have caused mill shutdowns, stalling
crushing of Brazil's bumper cane crop and prompting a slight
recovery for front-month prices that touched a three-year low of
15.93 cents per lb last week.
Prices have been weighed down by an expected bumper crop in
Brazil, where the harvest pace picked up in the first half of
Mills in the country's main cane region boosted sugar output
in the first half of the month after rains slowed crushing at
the end of June, recent data showed. They also increased the
amount of cane diverted to sugar production to 45.4 percent from
"So far at least, the mills in Brazil have been running
mostly to produce ethanol," Bunge Ltd Chief Executive
Soren Schroder told Reuters after the agricultural trading house
reported second-quarter earnings.
"At the moment, it's a toss-up between hydrous ethanol and
sugar. Hydrous and sugar prices are close."
Traders have said increased ethanol production in Brazil
will support global sugar prices, helping erode large global
stocks of the sweetener.
October white sugar on Liffe edged up $2.50, or 0.5
percent, to settle at $477.10 a tonne.
COCOA HOVERS NEAR TECHNICAL RESISTANCE
September cocoa futures on ICE closed down $13, or
0.6 percent, at $2,347 a tonne.
The contract climbed to $2,381, the highest level since June
12, in largely technically-driven buying but encountered strong
resistance in the $2,350-$2,400 range, dealers said.
"I don't think the dry weather is enough to push it over the
top. We would need another catalyst, which so far is nowhere to
be seen," said Hector Galvan, senior market strategist for RJO
Futures in Chicago.
Concern that dry weather in West Africa would affect
supplies in the world's top producing region has contributed to
The cocoa market will likely be in a supply deficit in
2013/14, though it will be smaller than previously forecast,
with output in Ivory Coast and Ghana expected to climb and
December cocoa in London lost 4 pounds, or 0.3
percent, to settle at 1,591 pounds a tonne.
ICE September arabicas rallied 3.55 cents, or 2.9
percent, to close at $1.2480 per lb.
Arabica coffee extended earlier gains after Liffe data
showed a big drawdown on robusta exchange stocks, reported after
the London market closed, a U.S. trader said.
Coffee stocks fell by 17,500 tonnes to 98,250 tonnes,
according to Liffe data.
Earlier gains were seen on the weakening U.S. dollar and
short-covering after the September contract fell nearly 4
percent during the previous session, dealers said.
Indications that coffee crop damage would be limited after
forecasts for a cold snap in Brazil, the world's largest
producer, drove Wednesday's big loss. Prices rallied to a near
two-month high of $1.34 per lb last week.
Widespread rains are weakening a harsh cold front that just
missed the country's southern coffee regions over the past
couple of days, weather forecasters at Somar said.
An outbreak of leaf rust disease in Central America is
unlikely to boost coffee futures prices, which are near their
lowest level in four years, because a record crop in Brazil will
fill the gap, a Reuters poll found.
Liffe September robusta coffee rose $12, or 0.6
percent, to finish at $1,908 a tonne, reversing earlier losses.
(Additional reporting by Tom Polansek in Chicago and Marcy
Nicholson in New York; Editing by Kenneth Barry and John