SOFTS-Arabica coffee prices ease, but still set for weekly gain

Adds background, updates prices

LONDON, July 29 (Reuters) – Arabica coffee futures on ICE were lower on Friday, but remained on track for a weekly gain as the market continued to focus both on this year’s harvest in Brazil and the outlook for next year’s crop in the world’s top producer.

COFFEE

* September arabica coffee KCc1 was down 1.5% to $2.1520 per lb at 1308 GMT, although the contract remained on track for a weekly gain of about 4%.

* Dealers said the market was supported partly by sentiment that this year’s Brazilian crop appears to be slightly lower than some had expected, while next year’s harvest prospects could potentially be dented by recent dry weather.

* “Coffee growers in Brazil have reported that the crop volumes are lower than they had anticipated, even if the effects of last year’s frost are taken into account,” Commerzbank said in a market update.

* A Reuters poll issued on Friday had a median forecast for this year’s Brazil crop of 63 million bags, while production is expected to climb next year to 71 million. COF/POLL

* September robusta coffee LRCc1 rose 0.4% to $2,023 a tonne.

SUGAR

* October raw sugar SBc1 fell 0.7% to 17.58 cents per lb, slipping back down towards a one-year low of 17.32 cents set on Wednesday.

* Dealers said a drop in gasoline prices in Brazil could have a mildly bearish impact, potentially reducing demand for cane-derived biofuel ethanol and prompting mills to use more cane to make sugar.

* Brazilian state-run oil company Petrobras PETR4.SA on Thursday said it would cut gasoline prices at its refineries to 3.71 reais ($0.7110) per litre from 3.86 reais on Friday, a 4% cut that will take prices to their lowest since March.

* October white sugar LSUc1 fell 0.9% to $527.10 a tonne.

COCOA

* September New York cocoa CCc1 rose 0.2% to $2,321 a tonne.

* September London cocoa LCCc1 was 0.5% up at 1,712 pounds a tonne.

(Reporting by Nigel Hunt Editing by David Goodman and Mark Potter)

((nigel.hunt@thomsonreuters.com; +44 (0) 7990 561421; Reuters Messaging: nigel.hunt.thomsonreuters.com@reuters.net ))

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