NEW YORK/LONDON: Arabica coffee and raw sugar futures on ICE fell on Tuesday, pressured by weakness in the currency of Brazil, the top producer of both commodities, while cocoa touched a 10-week high.
A weaker real increases local returns on dollar-traded commodities, encouraging Brazilian producers to sell.
COFFEE
* December arabica coffee settled down 3.85 cents, or 3.3 percent, at $1.1325 per lb.
* Prices were pressured by the Brazilian real, which touched its weakest level in more three weeks.
* The recent rally in coffee prices, driven in part by short-covering, had lost steam, dealers said.
* “On the 18th of September, funds were short about 113,000 lots. A week ago, they were short about 44,000 lots. They’ve already covered a tremendous amount. They’ve got more to sell if they want to,” one US trader said.
* Colombia’s October coffee production rose slightly year-on-year, but exports were down, a growers’ group said.
* January robusta coffee settled down $19, or 1.1 percent, at $1,669 per tonne.
* Brazilian robusta has been flowing into Europe – a market that traditionally does not consume it – due to tight exchange supplies and a slump in the real, trade sources said.
SUGAR
* March raw sugar settled down 0.19 cent, or 1.4 percent, at 12.96 cents per lb, pressured by the weaker Brazilian real.
* Still, the market was underpinned by diminishing outlooks for 2018/19 production, particularly in Brazil and the European Union, dealers said.
* “Part of the bulls’ short-term concern is that once the Diwali celebrations are finished and as the new crop in India continues to pick up pace, the pressure of Indian exports may start to be felt,” James Liddiard, senior vice president at consultancy Agrilion, said in a note.
* December white sugar settled down $6, or 1.7 percent, at $342 a tonne as its discount to March continued to widen.
COCOA
* March New York cocoa settled up $53, or 2.3 percent, at $2,388 per tonne, its sixth consecutive positive finish.
* March London cocoa settled up 18 pounds, or 1 percent, at 1,726 pounds per tonne.
* Positive demand signals were supportive, said Peter Mooses, senior market strategist at RJO Futures. “Earnings have been good for a lot of the companies tied to cocoa – so that does carry over mentally, at least, to the commodity.”
* Open interest fell for the second straight session on Monday, ICE data show.
* Supplies from top grower Ivory Coast have been plentiful, exporters said.
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