Recasts, includes closing prices and comments
NEW YORK/LONDON, Jan 25 (Reuters) – Arabica coffee futures on ICE closed 2% higher on Tuesday, regaining ground after falling for three consecutive sessions, while raw sugar prices were slightly weaker.
COFFEE
* March arabica coffee KCc1 settled up 4.95 cents, or 2.1%, at $2.379 per lb.
* Dealers said the market had found some support after the recent sharp decline when it was caught in the overall sell-off in agricultural commodities linked to the prospect of the U.S. Federal Reserve tightening monetary policy soon.
* Tighter monetary policy typically hurts riskier assets such as commodities.
* Dealers also noted that demand for coffee was generally resilient and it could outperform some other commodities if the economic outlook becomes more bearish.
* They noted the price outlook for coffee could hinge on the extent to which last year’s frosts and drought adversely impact the forthcoming crop in top producer Brazil.
* “Arabica coffee may rise further if expectations for an adverse weather-related slump in Brazil’s production come to fruition over the coming months,” Saxo Bank said in a report.
* March robusta coffee LRCc2 rose $40, or 1.8%, at $2,237 a tonne.
SUGAR
* March raw sugar SBc1 fell 0.03 cent, or 0.2%, at 18.78 cents per lb.
* Dealers said a stronger dollar exerted some downward pressure on prices. FRX/
* They noted that March’s premium to May SB-1=R has been rising recently, possibly indicating appetite to take delivery against the front month contract, which expires at the end of next month.
* Brazilian sugar exports were heading for a poor performance in January with preliminary data from the Trade Ministry showing a 31% fall in volumes up to the third week of the month.
* March white sugar LSUc1 fell $0.50, or 0.1%, at $504.00 a tonne.
COCOA
* March London cocoa LCCc1 settled down 7 pounds, or 0.4%, to 1,691 pounds per tonne after dipping to a low of 1,688 pounds for its weakest level since Jan. 7.
* March New York cocoa CCc1 rose $10, or 0.4%, to $2,503 a tonne.
* Dealers said trends for both New York and London had turned down on daily charts as weather in West Africa continues to be positive for future production.
($1 = 0.7404 pounds)
(Reporting by Marcelo Teixeira and Nigel Hunt Editing by David Evans, David Goodman and Mark Heinrich)
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