ICE arabica coffee futures consolidated higher in thin volume on Friday, a day after tumbling to a four-year low as commodities took a hit and investors grappled with the changing outlook for the Federal Reserve's monetary policy. ICE Futures US raw sugar climbed but held well within the range of the previous session, when it dropped the most since October, and cocoa on both ICE and Liffe was little changed after falling to multi-month lows earlier.
September arabica coffee futures on ICE settled up 0.95 cent, or 0.8 percent, at $1.1930 per lb, hovering near the lowest level for the second month since July 2009 of $1.1710 per lb, hit on Thursday. "Arabicas got slammed yesterday. The market is up a little bit today, probably nursing its wounds from yesterday," said one coffee futures broker. A Macquarie Bank report said arabica coffee prices had fallen below costs of output in most key producer regions. "Weaker emerging market currencies against the USD may offer some short-term respite for producers of dollar-denominated coffee," Macquarie said, referring to Brazil's real currency.
Commerzbank said in a daily report: "All things being equal, the weaker real will improve Brazilian sugar and coffee producers' export earnings." ICE certified Brazilian coffee, marking the first time the world's biggest grower delivered beans to New York this week. September robusta coffee futures on Liffe closed up $7, or 0.4 percent, at $1,743 a tonne, holding above the lowest level for the second month since October 2010 at $1,704 reached on June 14.
July raw sugar on ICE finished up 0.36 cent, or 2.2 percent, at 16.74 cents per lb, still relatively near the 16.17 cents trough hit on June 13, the lowest level for the benchmark in almost three years. The global sugar market faces a surplus, pressured by huge supplies from origins such as Brazil and Mexico. "News of protests in Brazil and escalating violence have taken the headlines this morning and the bulls will tell you there's going to be disruption to the 'exporting machine'," Tom Kujawa of broker Sucden Financial Sugar said.
August white sugar on Liffe closed up $8.40, or 1.7 percent, at $496.50 a tonne. Cocoa futures on ICE were choppy, with early support coming from short-covering and industry buying, dealers said. September settled down $6, or 0.3 percent, at $2,151 a tonne, after touching $2,145 earlier, the lowest for the second position since April 8. September cocoa on Liffe closed up 6 pounds, or 0.4 percent, at 1,437 pounds a tonne, after falling to 1,425 pounds, the lowest for the second position since March 18.
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