Friday, 31 July 2015 17:01
LONDON: Robusta coffee futures held steady before a contract expiry on Friday, with dealers focused on a big front-month premium, while arabica edged up supported by a softer dollar. Raw sugar futures were steady, with upside capped by a weak Brazilian currency.
Cocoa was little changed in light volumes. September robusta was flat at $ 1,648 a tonne, not far from Tuesday’s two-month low of $ 1,624.
The most-active September arabica coffee contract on ICE Futures US rose 0.35 cent, or 0.3 percent, to trade at $ 1.2525 per lb, rising off this week’s 1-1/2-year low of $ 1.1985.
“A big factor is currency weakness in Brazil and Colombia,” said Carlos Mera, an analyst with Rabobank, adding that a weak Brazilian real would keep downside pressure on arabicas.
Further weakening in the Brazilian real’s value threatened to push coffee and sugar to fresh lows, traders said.
The weaker currency tends to encourage selling of the dollar-traded commodities in the world’s largest producer of both as it boosts returns in local currency.
In sugar, futures prices were capped by the weak real, a big supply overhang in India and Thailand, and forecasts for dry weather during cane harvesting in top grower Brazil.
October raw sugar futures on ICE traded down 0.01 cents, or 0.1 percent, at 11.26 cents a lb. “Buying has been cautiously weak and we could see futures extend downward moves in the coming days and weeks as indicators point towards additional losses,” said Kash Kamal, senior research analyst with Sucden Financial.
October white sugar was flat at $ 353.50 per tonne. September New York cocoa edged down $ 4, or 0.1 percent, at $ 3,217 a tonne.
London September cocoa on ICE eased 3 pounds, or 0.1 percent, at 2,141 pounds a tonne.
