Moves were exaggerated to the upside on cocoa and coffee due to the absence of London, where markets were closed for the UK bank holiday.
RAW SUGAR
* Benchmark October sugar futures on ICE slipped into negative territory as a tentative recovery from 2-1/2 month lows ran out of steam.
* Prices settled at 19.56 cents per lb, down 0.2 or 0.1 percent, falling for a third straight session.
* The market remained on the brink of bear territory after an 18.5 percent drop in prices since mid-July.
* Unica data showing harvesting in Brazil, the world's No. 1 grower, has caught up much of the ground lost during the heavy rains in May and June continued to weigh on sentiment.
* Technically the market remained weak, with its Relative Strength Index (RSI) below 30, an area often indicating a market is oversold.
* The speculative net long almost disappeared, dropping by 30,122 contracts to just 1,418 in the week to Aug. 21, according to the latest CFTC data.
ARABICA COFFEE
* Benchmark December arabica futures rose 2.73 percent to $1.6735 per lb, its biggest one-day gain since end July and breaching a 14-day moving average around $1.6553.
* Signs of weakening demand persist, with exchange stocks hitting fresh two-year highs of 1.92 million bags and physical differentials remaining under pressure.
* Surging robusta exports from Vietnam in August will reinforce concerns that arabica demand is falling as roasters switch to the lower-priced bean.
* The market would be prone to short-covering after a surge in speculative shorts in the Commodity Futures Trading Commission data - traders.
* Speculators raised their net short position in coffee by 41 percent to 24,584 lots, almost hitting levels last seen in 2008 when the market was in the throes of the global economic crisis.
* December coffee will test support at $1.6035 per lb as a downtrend from the July 20 high of $1.9355 could have resumed.
COCOA
* Benchmark ICE December cocoa futures settled up $76, or 3.1 percent, at $2,473 per tonne, piercing short- and long-term moving averages on the way up.
* Apart from a brief flirt to $2,501 per tonne on Aug. 13, cocoa has not been above $2,500 per tonne, a level considered critical for the market to continue higher, since last November.
* Short-covering was triggered by news that at least four people were killed in an exchange of fire between soldiers and unidentified gunmen at an army checkpoint in southern Ivory Coast, the world's largest cocoa producer.
* Any more negative news about weather or violence in West Africa could trigger a rally above $2,500 per tonne - Hector Galvan, senior market strategist for RJO Futures.
* A break through $2,500 per tonne would give market chance to test $2,780 per tonne, levels not seen since November last year - Galvan.
* Speculators trimmed their net long in cocoa by 1,251 lots to just under 5,000 in the week to Aug. 21.
* Lindt's chief executive downplayed the impact of a potential drop in output from Ghana, the company's main source of beans, where heavy rains have raised concerns that output will fall, saying the gourmet chocolate maker would source beans in Indonesia instead
* A delay in government distribution of agricultural chemicals in Ivory Coast has hampered cocoa farmers' ability to fight off an outbreak of disease ahead of the new crop season.
3:56 PM SETTLE NET PCT LOW HIGH CURRENT
CHNG CHNG VOL
Sugar OCT 19.56 0.01 0.1% 19.52 19.97 33,958
Sugar MAR 20.25 -0.01 -0.1% 20.20 20.64 25,098
Cocoa SEP 2518 81 3.3% 2,518 2,542 19
Cocoa DEC 2473 75 3.1% 2,400 2,498 9,535
Coffee SEP 167.05 4 2.5% 165.00 167.45 115
Coffee DEC 167.35 3.85 2.4% 164.50 167.70 9,046
TOTAL MARKET VOLUME
CURRENT 30D AVG 250D AVG
ICE SUGAR 72,652 113,650 88,516
ICE COCOA 11,470 23,774 19,013
ICE COFFEE 12,477 24,502 19,769
(Reporting by Josephine Mason; editing by Jim Marshall)
Source: http://www.reuters.com/article/2012/08/27/markets-softs-close-idUSL1E8JRG2920120827
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