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SOFTS-Cocoa falls, market awaits I.Coast exports; coffee up

Published 04/18/2011, 08:02 AM
Updated 04/18/2011, 08:12 AM
SCOP
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* ICE coffee pushed up by speculator and fund buying-dealer

* Cocoa market focussed on resumption of activity in I.Coast

* Bumper Thai cane crop weighed on sugar prices

(Adds quotes, details, byline, updates prices)

By Sarah McFarlane and David Brough

LONDON, April 18 (Reuters) - Cocoa prices fell on Monday on thin volumes as dealers awaited news on the situation in top producer Ivory Coast, where cocoa exports are yet to resume.

Arabica coffee prices edged towards a 34-year high hit in March as bullish technicals supported the market, while sugar was steady as a larger-than-expected Thai crop weighed.

Top cocoa producer Ivory Coast was in focus as dealers awaited news on the resumption of trade activity after president Alassane Ouattara said last Wednesday that everything was in place for the immediate resumption of cocoa exports.

"It's still a volatile situation ... it's probably going to take a while for things to normalise," a London-based broker said, adding it would be surprising if exports resumed within the next couple of days.

ICE July cocoa futures fell $38, or 1.2 percent, to $3,119 a tonne at 1126 GMT.

"Volumes are terrible, so any weak selling can trigger stops," a second London-based broker said, adding people were reluctant to trade cocoa without more information on Ivory Coast.

News on the state of the country's coming mid crop was also keenly awaited.

Liffe July cocoa was down 19 pounds at 1,960 pounds a tonne.

COFFEE, SUGAR

Coffee prices edged higher as dealers said the market looked overbought but technicals remained bullish.

"It's a question of whether it could break the recent high; for the moment it looks like it could get there," a London-based broker said referring to the 34-year high of $2.9665 a lb hit on March 9.

A bullish target at $2.9685 per lb is unchanged for New York coffee based on its wave pattern and a Fibonacci projection analysis, Reuters analyst Wang Tao said.

"A lot of the move is being led by speculators and funds," the broker said.

Dealers said that while there was enough coffee available to meet global consumption, there remained a shortage of high-quality beans deliverable against the ICE arabica contract.

"They (ICE) definitely need to widen the scope of the contract," a London-based analyst said.

ICE July arabica coffee rose 0.10 cents or 0.03 percent to $2.9120 per lb at 1128 GMT, while Liffe July robustas were up $4 or 0.2 percent at $2,472 a tonne.

ICE July raw sugar futures were slightly higher as a bumper Thai crop capped gains.

"A larger-than-expected Thai crop is keeping a lid on the market," a sugar futures dealer said, adding that the cane harvest in the centre-south of Brazil, the world's top producer and exporter of the sweetener, appeared to be progressing well.

Thailand, the world's second-biggest sugar exporter, expects record output of 9.0 million tonnes in its current 2010/11 crop, up 30 percent from the previous crop, senior officials and traders said on Monday.

ICE May raw sugar futures rose 0.15 cent or 0.6 percent to 24.74 cents a lb.

Dealers saw downside price risk due to expectations of ample global supplies and saw key support in ICE July raw sugar futures at 21 cents a lb.

On the white sugar market the focus was the delivery against expiry of the London May contract on April 15.

Dealers said they believed that just over 350,000 tonnes had been delivered in total, and probably included Indian, Thai and Guatemalan sugars.

An announcement on delivery details was expected from Liffe later on Monday.

London May white sugar fell $0.10 or 0.02 percent to $632.60 per tonne.

(Reporting by Sarah McFarlane, editing by Jane Baird)

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