SOFTS-Raw sugar hits 3-1/2 month low, coffee also falls

Credit: REUTERS/DARREN WHITESIDE

Adds quote, background, updates prices

LONDON, Dec 6 (Reuters) - Raw sugar futures on ICE slid to a 3-1/2 month low on Wednesday as an improving outlook for production in Brazil weighed on the market while coffee prices also fell.

SUGAR

* March raw sugar SBc1 was 4.9% lower at 23.73 cents per lb by 1445 GMT after setting a 3-1/2 month low of 23.72 cents.

* Dealers said larger-than-expected sugar production in the key Centre-South region of Brazil had eased supply tightness and contributed to the current bout of long liquidation by investment funds.

* They noted CS Brazil 2023/24 sugar production was now expected to be around 41.5-42.0 million metric tons.

* A Reuters poll of traders and analysts issued in August had put production at 39 million tons and forecasts have gradually been rising since then.

* March white sugar LSUc1 fell 4.4% to $661.10 a ton.

COFFEE

* March arabica coffee KCc2 fell 3.95% to $1.7645 per lb.

* Dealers said the recent rise in prices to a six-month high had led to a pick-up in producer selling in Brazil.

* They also noted ICE certified stocks had risen by 5,275 bags on Tuesday to 229,341 bags although close to the lowest levels in at least 24 years.

* January robusta coffee LRCc1 fell 0.5% to $2,572 a metric ton.

COCOA

* March London cocoa LCCc2 was unchanged at 3,427 pounds a ton as the market consolidated after a sharp pullback from a record high of 3,572 pounds set on Nov. 30.

* The run-up in prices has been driven by the prospect of a third successive global deficit in 2023/24.

* "Although we anticipate prices to cool modestly in 2024, it will not result from an improving supply picture. Instead, weakening demand is expected to be the key to lower prices," Rabobank said in a report, projecting an average price of 2,930 pounds for London cocoa in 2024.

* Rabobank also said it was currently forecasting a global deficit of 160,000 metric tons in 2023/24 and an average New York cocoa price of $3,695 a ton.

* March New York cocoa CCc2 was up $0.6% at $4,130 a ton.

(Reporting by Nigel Hunt; editing by David Evans, Kirsten Donovan)

((nigel.hunt@thomsonreuters.com; +44 (0) 7990 561421; Reuters Messaging: nigel.hunt.thomsonreuters.com@reuters.net ))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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