NEW YORK/LONDON: Arabica coffee futures on ICE dropped to the lowest in more than 12 years on Tuesday, pressured by fund selling and the weak currency in top grower Brazil, while robusta fell to its lowest in 2-1/2 years on spillover weakness.
COFFEE
December arabica coffee settled down 0.35 cent, or 0.3 percent, at $1.0145 per lb, after dipping to 98.65 cents, the lowest for the second-position contract since July 2006.
Selling by funds, which already hold large net short positions in both arabica and robusta coffee futures, pressured prices, dealers said.
Currency weakness in Brazil, combined with the country’s harvest of what is widely expected to be a record crop, also pushed prices lower, dealers said.
Arabica futures pared losses in tandem with the Brazilian real against the US dollar, they said.
November robusta coffee settled down $14, or 0.9 percent, at $1,475 per tonne, after dipping to $1,465, the weakest for the second month since March 2016.
I think it is fund and spec going shorter and industry is relatively well covered so there is no big push from them to support the market. The path of least resistance is lower,” one dealer said.
SUGAR
October raw sugar settled up 0.04 cent, or 0.4 percent, at 10.64 cents per lb, after trading within the prior session’s range as the market sought direction.
Concerns about crop weather in Brazil and the European Union underpinned prices, dealers said.
The lackluster day came after futures rose to a three-week high in the prior session, when total open interest tumbled by nearly 18,000 lots, ICE data showed.
Brazil’s exports of raw sugar in August fell by around 33 percent versus the same month last year, trade ministry data showed on Monday when the US market was closed for a holiday.
Dealers attributed this expected decline to low sugar prices and a switch in Brazil to use more cane for ethanol.
December white sugar settled up $1, or 0.3 percent, at $327 per tonne.
The October white sugar premium over the raws rose to around $94, a contract high.
COCOA
December New York cocoa settled down $4, or 0.2 percent, at $2,332 per tonne, an inside session.
December London cocoa settled up 22 pounds, or 1.3 percent, at 1,690 pounds per tonne.
Source: Brecorder
