ICE arabica coffee futures jumped over 5 percent to a three-month high on Friday as forecasts for lower 2014/15 Brazil output revived worries over drought damage in the world's top grower. ICE raw sugar fell to a 5-1/2-month low, pressured by plentiful nearby supplies around the peak of the Brazilian harvest, while cocoa drifted further from a three-year peak, underpinned by expectations of strong demand.
The benchmark September arabica coffee contract on ICE Futures US vaulted as high as $2.068 a lb and was up 10.75 cents, or 5.5 percent, at $2.0580 at 1411 GMT.
The rise in arabica prices was triggered by an industry forecast released on Wednesday.
Brazil coffee exporter Terra Forte pegged the 2014/15 Brazilian coffee crop at 45.8 million 60 kilogram bags, down from a February forecast of 47.4 million bags because of drought losses of 20 to 30 percent.
Buying gathered pace on Friday as prices punched through technical resistance levels. "Further moves on the upside could see prices close above $2 before targeting previous consolidation around $2.10," said Kash Kamal, a research analyst with Sucden Financial, referring to the second-month contract.
"There were hopes for a while during recent months that the damage to crops due to drought might not turn out to be as serious as initially thought, but apparently this is not the case," Commerzbank said in a market report. Taking the lead from arabicas, September robusta coffee futures on Liffe rose $34, or 1.6 percent, to trade at $2,138 per tonne in modest volume of 5,674 lots.
ICE October raw sugar fell 0.2 cent, or 1.3 percent, to trade at 16.25 cents a lb, having earlier touched a 5-1/2-month low of 16.20 cents, pressured by ample nearby Brazilian supplies.
"August is forecast as being a dry month in centre-south Brazil, so the crush will continue at a good pace," said Nick Penney, a senior trader with Sucden Financial Sugar.
Liffe October white sugar traded down $3.90, or 0.9 percent, at $433.80 a tonne in slim volume of 2,677 lots.
"In the physical market, it is thought that the current large discounts that are being offered for both Brazilian and Thai prompt-shipment sugar, may well be attracting interest from some of the standalone refiners," a senior London-based sugar futures broker said.
The September cocoa contract on ICE Futures US was down $35, or 1.1 percent, at $3,184 a tonne, drifting further from last week's three-year peak of $3,234.
In London, second-month cocoa futures hit a December contract high of 1,994 pounds a tonne before trading down 17 pounds, or 0.85 percent, at 1,972 pounds per tonne.
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