SOFTS-Markets sink as poor U.S. data sparks sell-off

NEW YORK/LONDON(Reuters) - Coffee, cocoa and sugar
futures stumbled Wednesday as sentiment was soured by poor U.S.
data which indicated economic growth may be slowing faster than
expected, analysts said.
    Investors dumped the U.S. stock market and the dollar,
crude slid by up to 1.0 percent and safe haven buyers flocked
to gold as it rose nearly 1.0 percent.
    The softs complex was hit by ``outside market type''
liquidation which deflated sentiment in the sugar, coffee and
cocoa markets, said Sean McGillivray, head of asset allocation
in Great Pacific Wealth Management in Oregon.
    New York's July arabica coffee contract dropped 7.60 cents
to trade at $2.57 per lb at 12:31 p.m. EDT (1631 GMT), with
London's July robusta futures losing $42 to trade at $2,560 per
    Arabica coffee futures fell to its lowest level since April
5 as a flurry of sell-stops were triggered when the key July
contract sank below $2.60, traders said.
    ``That triggered more selling and now we're seeing more
liquidation,'' said Hernando De La Roche, director of Hencorp
Coffee Group in Florida.
    The market was also pressured by news from Telvent DTN of
near to above normal temperatures in top grower Brazil at a
time when the country's coffee crop could potentially see a
damaging frost.
    Coffee prices are set to remain high though, as increased
maintenance and fertiliser use will not boost production enough
to match growing demand.

    White sugar futures outpaced gains in raws due to firm
North African and Middle Eastern physical demand for refined
sugar before Ramadan, dealers said.
    Dealers talked of pent-up cash demand for refined sugar due
to the slow start to the cane harvest in the centre-south of
Brazil, a slowdown in whites exports from India, and political
upheaval in North Africa and the Middle East.
    ``In the whites, it's mainly Ramadan driven,'' said Peter De
Klerk, a senior analyst with London-based merchant Czarnikow.
    New York's July raw sugar contract fell 0.40 cent to trade
at 22.78 cents per lb at 12:32 p.m. London's August white sugar
futures sank $7.90 to trade at $664.10 per tonne.
    Cocoa prices eased with the release of Ivory Coast stocks
weighing on the market after months of stalled trade in the
world's top producer.
    New York's July cocoa contract fell $46 to finish at $2,953
per tonne. London's July cocoa futures shed 26 pounds to
conclude at $1,814 pounds per tonne. 
    The difference between London and New York prices has
narrowed considerably as the backlog of Ivory Coast cocoa is
expected to hit the market in the coming months.
    ``The arbitrage is very narrow on a historical basis. It's
the narrowest it's been for years, which also reflects that
there's plenty out there,'' a London-based broker said.Indonesia
have also helped tighten the difference between the
London-based NYSE Liffe market and New York-based ICE cocoa
futures prices, which are usually significantly lower.
    West African cocoa is typically delivered against the Liffe
contract and Indonesian cocoa against the ICE contract.