Arabica coffee futures on ICE turned lower for the first time in seven sessions on Friday, on forecasts for rain in top grower Brazil, but made their strongest weekly performance in five weeks after surging to two-year highs on output concerns. London white sugar futures on Liffe dropped 3 percent ahead of Tuesday's May contract expiry, which is expected to feature Guatemalan and Mexican supplies delivered to the tape. Raw sugar on ICE Futures US also fell, as a cyclone struck land in Australia just north of cane areas, reducing potential to damage.
Cocoa futures on rose in rangebound dealings.
Arabica coffee prices hit their highest level since February 2012, after a small town in Brazil's biggest coffee-growing state declared a state of emergency because of the impact from a January-February drought, and an analyst said very little of the country's 2014 crop has been sold since February.
Most-active ICE July arabica coffee futures settled down 4.85 cents, or 2.3 percent, at $2.0355 cents per lb, after peaking at $2.1090 earlier in the session, the highest for the second position since February 2012. The contract extended losses late in the session, falling 3 cents, or 2 percent, in the final 10 minutes of trade on a bout of short selling during the settlement window, dealers said. Total arabica futures volume was heavy, with preliminary data pegging it above 52,500 lots, more than double the 250-day average.
The contract closed the week up 8.8 percent, its biggest surge in five weeks. July arabica coffee got off to a strong start for the week after Brazil's national coffee council (CNC) estimated this year's output will fall as low as 40.1 million bags.
The market turned lower on forecasts for much needed rain in Brazil's coffee belt, though it's uncertain how much this will curb further losses from the drought as precipitation remained below normal.
"Short term, we expect potential for modest gains around $2.10, while a break above this level opens up potential for gains towards the $2.15 area," said Myrto Sokou, senior analyst at Sucden Financial, referring to the second-month contract.
Arabica May options expired at the end of the day with heavy open interest at $2.00, $2.05 and $2.10, helping to keep the futures market within this range.
July robusta coffee futures on Liffe eased $16, or 0.7 percent, to finish at $2,142 per tonne.
In sugar, front-month Liffe May white sugar futures sank $12.90, or 2.9 percent, to close at $436.00 a tonne. For the week, it dropped 6 percent, its weakest performance since October 2012.
Front-month raw sugar futures on ICE fell 0.28 cent, or 1.6 percent, to end at 16.80 cents a lb. The market ignored the strongest cyclone to hit Australia in three years as it made landfall farther north than expected, reducing sugarcane damage potential, a meteorologist and a trader said.
Total volume was heavy as it was the final day of the index fund roll, taking positions out of the May contract into July.
July cocoa futures on ICE ended up $14, or 0.7 percent, at $2,999 a tonne, while Liffe July cocoa futures settled up 15 pounds, or 0.8 percent, at 1,884 pounds.
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