Sugar gains as Middle East tensions escalate, Brazil rains loom
LONDON, Oct 2 (Reuters) -Raw sugar futures on ICE rose on Wednesday as oil prices rallied on escalating Middle East tensions, with the upside capped somewhat by forecasts for long awaited rains in top producer Brazil.
Cocoa recovered meanwhile from the prior day's plunge in thin, volatile trade.
SUGAR
* March raw sugar SBc1 rose 0.8% to 23.15 cents per lb at 1038 GMT, having closed up 2.2% on Tuesday.
* Oil prices rallied on concerns Middle East tensions could boil over and disrupt crude supplies. Higher oil prices increase demand for ethanol, tempting Brazilian mills to produce more of the cane-based biofuel at the expense of sugar.
* Dealers said supplies in the local market in Brazil were in any case still tight thanks to the drought.
* They added that rains forecast for next week were not nearly enough and that the market needs consistent, above normal downpours to improve the outlook for next year's crop.
* December white sugar LSUc1 rose 0.3% to $584.30 a metric ton.
COCOA
* December New York cocoa CCc1 rose 2.5% to $7,217 a metric ton settled down $683, or 8.8%, to $7,039 a ton, having lost 8.8% on Tuesday and 6.8% on Monday.
* Favourable weather in top growers Ivory Coast and Ghana is improving the main crop outlook and helping keep a lid on cocoa after a blistering rally earlier this year.
* Cocoa futures trade remains extremely volatile also due to historically low open interest.
* March London cocoa LCCc2 rose 2% to 4,506 a ton, having lost 1.9% lower in the prior session and 4.1% on Monday.
COFFEE
* December arabica coffee KCc1 edged 0.3% higher to $2.6485 per lb, having settled down 2.3% on Tuesday.
* November robusta coffee LRCc1 fell 1.9% at $5,344 a ton as the new season gets underway in top producer Vietnam.
* Dealers said coffee supplies, especially of robusta, remain tight but that despite this, the market might have peaked in the short term as long awaited rains are forecast for top producer Brazil next week.
* They added however, that consistent rains are needed and that the long drought has already hurt the upcoming crop.
Reporting by Maytaal Angel; Editing by Shreya Biswas
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