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SOFTS-Arabica coffee down as producers sell on weak real

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Published: Friday, 30 Nov 2012 | 8:45 AM ET
By: Stephen Eisenhammer

(Adds details, quotes, updates prices)

* Liffe robusta stocks slightly lower

* ICCO sees 2011/12 global cocoa surplus of 90,000 t

LONDON, Nov 30 (Reuters) - Arabica coffee futures edged lower on Friday, as the recent rise in prices combined with a weak real stoked selling from top producer Brazil.

Raw sugar and cocoa also eased as concerns over the stalemate in U.S. budget talks weighed on markets.

Arabica and robusta coffee futures eased, trimming the week's gains, unable to maintain the upward momentum of recent sessions as the recent rise prices combined with currency moves prompted producer selling.

March coffee futures on ICE slid 0.7 cent or 0.5 percent to $1.5570 per lb at 1325 GMT, but remained above Wednesday's 29-month low of $1.4710.

"We've seen a bit of producer selling coming in this morning which is putting a cap on the market", said a London-based broker.

"Although the dollar is a bit weaker this morning against the major currencies it's a bit stronger against the real", the broker added, encouraging producers in the world's biggest coffee exporter to sell while keeping prices low.

Dealers said origin selling in Vietnam, where the harvest is in full swing, limited upside potential in the robusta market.

January robusta coffee futures were off $15 or 0.8 percent at $1,923 a tonne.

Certified coffee stocks held in NYSE Liffe nominated warehouses fell marginally to 108,490 tonnes as of Nov. 26, from 108,580 tonnes on Nov. 12, exchange data showed.

"People don't really need certified stocks, at the moment there's plenty of coffee coming directly from origin," said a European trader.

SUGAR RANGEBOUND

March sugar futures on ICE were slightly lower, trading down 0.04 cent or 0.2 percent at 19.28 cents a lb.

Technical analysts noted that the sugar market remained rangebound, struggling to break above resistance at the key 20 cent level.

"Sugar hit the declining channel support which has been developing for a year. It is at 18.90/78," said Societe Generale in a commodities note.

"Short-term, 19.00/18.90 is also the lower limit of the recovery channel which has been forming for a couple of weeks. 19.55/63 must break for the rebound to continue to the channel upper limit at 20.10/20.20".

March white sugar on Liffe fell $1.00 or 0.2 percent to $514.30 per tonne.

Cocoa prices fell on light volumes of selling as dealers noted that chocolate manufacturers were holding off adding to stocks in the hope prices would fall further.

Benchmark ICE March cocoa futures were off $31 or 1.2 percent at $2,460 a tonne.

"You're not getting many end users buying at this level, with the market slipping like it is, any buying interest has now been pegged lower", said a London-based broker.

"There's some origin related selling and enquiries but there are no real buyers."

Liffe March cocoa futures traded down 20 pounds or 1.3 percent at 1,565 pounds per tonne.

The International Cocoa Organization (ICCO) on Friday revised its estimate for the world cocoa balance for the 2011/12 season to a surplus of 90,000 tonnes from a previous forecast of a deficit of 19,000 tonnes.

(Additional reporting by Sarah McFarlane)

 Print
LONDON, Nov 30- Arabica coffee futures edged lower on Friday, as the recent rise in prices combined with a weak real stoked selling from top producer Brazil. March coffee futures on ICE slid 0.7 cent or 0.5 percent to $1.5570 per lb at 1325 GMT, but remained above Wednesday's 29- month low of $1.4710.

   
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