Updates prices

LONDON, June 15 (Reuters) - World sugar prices steadied on Monday after hitting their lowest in nearly two months after the U.S. and Iran said they had reached an initial deal to end their war and resume traffic through the Strait of Hormuz, a vital oil transit chokepoint.

The news sent energy prices sharply lower, weighing on sugar by making it more profitable for cane mills to produce more of the sweetener and less of the biofuel ethanol.

Raw sugar futures on the ICE exchange SBc1, seen as a global price benchmark, hit their lowest since late April at 13.61 cents per lb in the wake of the U.S.-Iran news, but were up 0.2% at 13.72 cents by 1239 GMT.

White sugar futures LSUc1 fell 1.3% to $438.80 a metric ton.

Broker and consultant Michael McDougall said there could be some initial support for raws if the U.S.-Iran deal holds thanks to increased demand from previously locked in sugar refineries in the Gulf.

The same factors are weighing on white sugar prices, as Gulf refiners will be able to produce more of the sweetener if the deal holds.

Elsewhere, sugar's losses were limited by worries over the El Nino weather pattern which is expected to curb production in several key sugar growing countries, including India and Mexico.

Moderate to strong El Nino conditions are likely to prevail during India's June-September monsoon season, the country's weather bureau said on Friday.

In other soft commodities traded, London cocoa LCCc2 rose 6.8% to £3,082 per ton, New York cocoa CCc2 rose 7.5% to $4,156 a ton, arabica coffee KCc2 rose 1% to $2.5595 per lb while robusta coffee LRCc2 gained 0.7% to $3,550 a ton.

Cocoa is being underpinned by concerns that production in West Africa will decline in the 2026/27 season due to El Nino weather conditions.