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London white sugar futures closed lower on Monday hurt by continued long liquidation on the December contract which is due to expire next week, traders said.

December dipped to a 2-1/2 month low of $275.50 a tonne and ended down $4.20 at $276.00 amid sentiment there is plenty of European Union sugar available to deliver against the contract which is due to expire on November 15.

"I think there will be a lot of European whites around for December, March and May," one trader commented.

March also fell, closing $4.90 lower at $287.10.

Total volume was 7,048 lots.

Key support for the March contract was anticipated around $286.00 a tonne.

Traders said there continued to be talk that the US Department of Agriculture might announce an increase in import quotas soon, although the exact timetable was not clear.

"There is no rush for them (the USDA)," one trader said, noting the rise could be around 300,000 to 400,000 tonnes.

Taiwan Sugar Corp bought a 34,000-tonne shipment of raw sugar from Australia's export monopoly Queensland Sugar Ltd, an official at the Taiwan company said.

COFFEE MOSTLY LOWER:

Liffe robusta coffee closed mostly lower on Monday, weakened by origin and fund selling as well as losses in New York arabica futures, traders said.

"The market is now under pressure and may go down further," a trader said.

Liffe's most-active January was down $7 at $988 a tonne on turnover of 3,730 lots.

"The market is very quiet now. There is a little of bit of origin and speculative selling," another trader said.

Total volume was a light 4,780 lots.

London coffee market had rallied last week over concerns over potential supply tightness after recent reports of crop losses and early harvest delays caused by heavy rains in Central America and Vietnam.

But favourable weather in Brazil has boosted crop prospects there.

Brazilian private forecaster Somar on Monday predicted light rain to fall on Brazil's south-eastern coffee belt this week.

In its 10-day forecast, Somar said rain will fall mainly in the forested zone of Minas Gerais between November 12 and 16 while further south in Parana and Sao Paulo the weather will be mainly dry.

The Economist Intelligence Unit (EIU) said on Monday the outlook in coffee had "turned more bearish in anticipation of a return to global over-supply".

COCOA CONTINUES SLIDE:

London cocoa closed at a six-week low on Monday, weakened by a currency-driven slide to contract lows in New York.

"The New York move on currency has drawn in their specs (speculators) over there and that has brought on the selling we've seen," said one London trader.

Liffe's front-month December contract finished down 12 pounds, at a session low of 798, the lowest in six weeks. December hit a contract low of 785 pounds on September 22. Total volume was a modest 8,260 lots.

Copyright Reuters, 2005


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