London, Oct 20 - A stronger dollar erased gains in coffee, sugar and cocoa futures on Monday, while protests by farmers at top grower Ivory Coast's second port of San Pedro gave support to nearby cocoa futures.
"The currency movement (strengthening dollar) is outweighing the Ivory Coast story," a cocoa futures trader said.
Another said, "Interruptions of supply will make availability of cocoa in the December position tighten."
Cocoa lost ground in the afternoon as the U.S. dollar extended gains versus the yen after Federal Reserve Chairman Ben Bernanke told Congress another stimulus plan may be needed to boost the sluggish economy.
Having spent the morning in positive territory, December cocoa was 1 pound or 0.08 percent down at 1,269 pounds per tonne in modest volume of 3,128 lots at 1430 GMT. March was down 7 pounds or 0.5 percent at 1,290 pounds.
Benchmark ICE December cocoa was down $22 or 1 percent at $2,100 per tonne.
Ivory Coast cocoa farmers seeking higher prices for their beans blocked deliveries to the nation's second port of San Pedro on Monday, raising the risk of lower bean quality levels, exporters said on Monday.
"People are still putting the argument forward that there will be a (global) cocoa deficit (in 2009)," one cocoa trader said.
Cocoa prices remain under the spell of wider financial markets, limiting the impact of news last week that an election in Ivory Coast was set to be delayed.
Ivory Coast's presidential election scheduled for Nov. 30 is "technically impossible" this year and will be postponed to 2009, an official at the Independent Electoral Commission (CEI) said on Friday.
COFFEE
Coffee futures moved higher on roaster buying and short-covering, but the strengthening dollar erased most of its gains in the afternoon.
"In coffee and sugar we've definitely seen the first signs of some sort of recovery (in prices),"said Ole Hansen, manager of the futures and fixed income desk at Saxo Bank.
"The last three days action has given a little bit of hope that we may have turned the corner."
London January robusta coffee futures were up $9 or 0.5 percent at $1,803 per tonne in light volume of 5,346 lots at 1432 GMT.
ICE December arabicas were up 0.55 cent or 0.5 percent at $1.1615 per lb.
Vietnam, the world's second-largest coffee producer after Brazil, has started harvesting its 2008/2009 crop and there should be ample supply when the process peaks in 20 days, dealers and a coffee farmer said on Monday.
London white sugar futures rose in sympathy with ICE raw sugar on short-covering, although the stronger dollar trimmed gains in the afternoon, dealers said.
"The bounce we've seen in crude obviously helps as well," Hansen said.
Oil rose on Monday, supported by expectations OPEC may cut output this week to boost prices that have fallen more than 50 percent in just three months from a record high above $147 a barrel.
Hansen said market fundamentals had been put on the backburner for the moment.
"It has just been a scramble for cash," he said.
UK broker Sucden said in a daily market report, "Fund redemptions appear to be on hold for the time being."
Traders referred to reports that the United States may need to import more sugar due to storm damage to cane fields.
ICE March raw sugar was down 0.04 cent or 0.35 percent at 11.54 cents a lb at 1434 GMT.
London December white sugar was up $2.7 or 0.8 percent at $327.2 per tonne in thin volume of 1,344 lots.
Dealers said the supply outlook in sugar was tight, noting that India, the world's second-largest producer after Brazil, is shifting from exporter to importer.
Standard & Poor's Ratings Services said it had affirmed its 'AA-/A-1+' credit ratings on Queensland Sugar Ltd. (QSL) and revised the rating outlook to stable from negative.