LONDON: Arabica coffee futures on ICE fell on Monday, retreating further from last week’s almost seven-year highs as the damage from frosts seen in top producer Brazil at the weekend was considered limited.
COFFEE
September arabica coffee fell 2.1% to $1.7580 per lb at 1529 GMT, having closed down 8.6% on Friday in a sharp reversal from a peak above $2 earlier that week.
The frosts that hit Brazil last Friday and Saturday, the second to hit the country’s coffee regions in the past fortnight, were “less intense and reached a smaller coffee-producing area than expected”, Archer Consulting said in a note. Dealers said there was widespread profit-taking in the market but prices should soon find a floor given Brazil’s next arabica crop will be at least 10% lower than originally expected.
The worst cold snap to hit Brazil’s arabica regions in nearly 30 years will hurt production for at least the next two crops, according to an agronomist at the Minasul cooperative.
ICE coffee speculators cut their net long position by 210 contracts to 32,923 in the week to July 27, data showed.
September robusta coffee was flat at $1,786 a tonne, following arabica.
SUGAR
October raw sugar was up 0.8% at 18.05 cents per lb, still some way off last week’s five-month high of 18.81 cents.
Dealers said sugar has strong support at current levels, given concerns over the cane crop in top producer Brazil, which was hit by dry weather this season and was affected by the frosts.
They expect many analysts to lower their output forecasts yet again, though they cautioned that demand remains poor and India is keen to sell at current levels.
ICE sugar speculators raised their net long position by 18,754 contracts to 169,913 in the week to July 27.
October white sugar was up 0.5% at $447.70 a tonne.
COCOA
December New York cocoa was down 0.2% at $2,418 a tonne.
December London cocoa fell by 0.5% to 1,667 pounds a tonne. ICE cocoa speculators trimmed their net short position by 13,345 contracts to 16,169 in the week to July 27.
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