NY cocoa ends firm but off 4-1/2-mth high, sugar eases

Aug 3 (Reuters) - U.S. cocoa futures closed firm on Friday, but pared gains after hitting the highest level in 4-1/2 months as bullish options dealing, strong charts and the firm sterling encouraged heavy buying.

Raw sugar futures settled down a shade on improved production expectations in the Northern Hemisphere, while arabica closed higher.

RAW SUGAR

* Benchmark October raw sugar futures inched down 0.04 cent to finish at 22.00 cents a lb, their lowest settlement since July 5.

* For the week, the spot contract closed down 2.3 percent.

* Market bucked the day's firm trend in commodities as dealers viewed the recent rally as overdone with expectations for increasing supplies from crops in the Northern Hemisphere and as harvest progresses in top grower Brazil - traders.

* India's sugar futures hit a new contract high for the third straight session on Friday on strong consumer demand amid fears that the ongoing drought could sharply trim production in the next crop year, beginning on Oct. 1.

* Total open interest fell by 2,935 lots to 671,377 lots by Aug. 2 - ICE data.

ARABICA COFFEE

* September arabica futures rose 2.15 cents, or 1.3 percent, to close at $1.7380 per lb.

* For the week, the contract was virtually flat.

* Market lifted by the weak U.S. dollar against a basket of major currencies - traders.

* The strong commodity complex also provided some spillover support - traders.

* Total open interest dropped by 2,404 lots to 135,851 lots on Aug. 2 - ICE data.

* Differentials for many arabica coffee beans sitting in U.S. warehouses were flat to lower this week, encouraging many growers to keep their product off the cash market and sell to ICE Futures U.S. - U.S. importers.

COCOA

* Benchmark September cocoa futures closed up $29, or 1.2 percent, at $2,398 a tonne, having touched $2,436, the highest since mid-March.

* For the week, the spot contract closed up 2.9 percent.

* Chart-based buying helped lift the market as it climbed for seven days out of the past eight sessions, moving higher above the 200-day moving average - traders.

* Sterling jumped against the U.S. dollar, providing additional support - traders.

* Options-related buying helped lift the market with active call buying at $2,400 on September options, which expired at the end of the session, and at $2,700 in December - traders.

* This buying at higher levels caused dealers to speculate that the market will continue to move up - traders.

2:31 PM      SETTLE    NET     PCT      LOW    HIGH  CURRENT
                       CHNG    CHNG                       VOL
 Sugar OCT        22  -0.08   -0.4%    21.78   22.14   36,905
 Sugar MAR     22.44  -0.06   -0.3%    22.24   22.53   14,444
 Cocoa SEP      2398     20    0.8%    2,361   2,436   14,474
 Cocoa DEC      2411     15    0.6%    2,376   2,444    8,194
 Coffee SEP    173.8   1.15    0.7%   171.30  174.20    7,419
 Coffee DEC   176.55   1.25    0.7%   173.95  176.90    4,942
 
 TOTAL MARKET              VOLUME          
                CURRENT   30D AVG  250D AVG
 ICE SUGAR       64,034   110,090    96,213
 ICE COCOA       27,886    21,347    21,645
 ICE COFFEE      14,764    21,986    22,048

(Reporting by Marcy Nicholson in New York; Editing by Dale Hudson)

Source: http://www.reuters.com/article/2012/08/03/markets-softs-close-idUSL2E8J36UX20120803