ICE coffee climbs

ICE arabica coffee rose on Friday for the first time in six sessions, rebounding from the previous day's four-year low as the US dollar dropped, although plentiful supplies limited the upside of a market in a long-term downtrend. Cocoa trading on both Liffe and ICE Futures US turned lower on a forecast for much-needed rain in top grower Ivory Coast, while raw sugar inched higher.
September arabica coffee futures on ICE rose 2.65 cents, or 2.3 percent, to finish at $1.1825 per lb. The front month slumped to a four-year low of $1.1535 on Thursday. "Brazil's harvest is progressing well and there was a reasonable volume of new crop coffees traded," said a Volcafe report, the Swiss-based coffee division of commodity trade house ED&F Man, adding no threatening cold weather was in sight.
Total open interest has recently jumped, rising by nearly 3 percent on August 1 to 161,640 lots, the highest since June 18, exchange data showed. The market has recently felt additional pressure from the weak currency in top grower Brazil, which attracted selling by coffee producers of the dollar-traded commodity. On Friday, the real was little changed versus the US dollar while the green back turned lower against a basket of six major currencies.
A weak US currency encourages buying of dollar-traded commodities by investors holding other currencies. Robusta coffee futures on Liffee were also higher with November closing up $9, or 0.5 percent, at $1,867 a tonne. Cocoa futures on ICE dropped with September closing down $10, or 0.4 percent, at $2,291 a tonne, ignoring the sharply higher British pound versus the dollar, which typically provides support to the US market. "The weather forecast is calling for showers at the start of next week in Ivory Coast, which may also be contributing to some profit taking," said Hector Galvan, senior market strategist for brokerage RJO Futures in Chicago. "It has been dry recently, increasing fears that the next main crop could be under developed."
Other dealers said they were keeping a close watch on the weather in Ivory Coast. Speculators are holding net long positions in both ICE and Liffe cocoa markets. December cocoa in London fell 11 pounds, or 0.7 percent, to settle at 1,555 pounds a tonne. October raw sugar on ICE ended down 0.04 cent, or 0.2 percent, at 16.79 cents a lb. The front month hit a three-year low of 15.93 cents last month. October white sugar on Liffe settled up $1.70, or 0.3 percent, at $490.00 a tonne.