SOFTS-London cocoa hits year low as supply swells, while arabica coffee falls

LONDON, Oct 6 (Reuters) - London cocoa futures on ICE steadied on Monday after hitting fresh one-year lows as traders remained upbeat about supply prospects in top producer West Africa, while arabica coffee fell.

COCOA

London cocoa LCCc2 ​rose 0.6% to 4,382 pounds per metric ton at 1516 GMT, after having hit its lowest since early October last year at 4,290. The market fell 10% last week.

Below-average rains mixed with sunny spells across the Ivory Coast's main cocoa regions last week are expected to improve the size and quality of the main crop, farmers said.

Cocoa is under pressure as the West African harvest gets underway, while on the demand side, upcoming third-quarter cocoa grind data for Europe, North America and Asia is expected to show further declines.

"Weather conditions in West Africa appear to be stabilising and ... the larger London speculators seem to have a rather weak opinion of the market," said a dealer.

Cocoa speculators increased their net short position by 2,935 lots to 5,711 lots as of September 30, exchange data showed.

New York cocoa CCc2 rose 1.3% to $6,297 a ton after slumping to its lowest since last October at $6,066.

COFFEE

Arabica coffee KCc2 fell 2.5% to $3.6500 per lb, having gained 4.25% last week.

Traders have largely discounted extremely tight exchange stocks KC-TOT-TOT and are waiting to see whether the 50% U.S. tariff on Brazilian imports could be lifted in talks between the U.S. and Brazilian presidents.

Dealers cited reports in the Brazilian press that the U.S. and Brazilian presidents spoke via video call earlier, in a meeting described as "positive" but with few other details available.

"The anxiously awaited — yet unscheduled — meeting between President Trump and President Lula is critical. The direction of this market depends on whether these two can find a way forward," said coffee broker and consultant Michael J Nugent.

Robusta coffee LRCc2 fell 1.2% to $4,469 a ton, having gained 8% last week.

Top robusta producer Vietnam exported 81,000 tons of coffee in September, a year-on-year increase of 58.5%, government data showed.

SUGAR

Raw sugar SBc1 ​rose 1.5% to 16.72 cents per lb.

Broker ADM Investor Services said sugar would likely steady at around 16.69 cents/lb given negative technical signals, adequate supplies in Brazil and "reports that India might begin to use corn to produce ethanol in the country".

White sugar LSUc1 rose 1.4% to $463.70 a ton.