Arabica coffee futures on ICE dropped on Tuesday in volatile trading as top grower Brazil harvests its drought-impacted crop, while raw sugar prices dipped for the third straight day after last week's rally. Cocoa on ICE Futures US fell for the fourth consecutive session as the market corrected down from last week's almost three-year high, while Liffe cocoa also fell.
In coffee, benchmark ICE September arabica coffee futures slipped 1.15 cents, or 0.6 percent, to settle at $1.7625 per lb, paring losses after dropping 2.8 percent, as uncertainty around Brazil's crop persisted following the January-February drought. "The market is very confused and until we get a better grasp of what the damage is with this crop, we're going to have these big swings and a lot of volatility," said Nick Gentile, managing partner of New York-based commodity trading advisor NickJen Capital.
Soft commodity analyst Stefan Uhlenbrock of F.O. Licht in the Hamburg area said a clear outcome of Brazil's harvest will not be available until the end of July or August. The September Liffe robusta coffee contract eased $10, or 0.5 percent, to finish at $1,972 per tonne. The ICE September cocoa contract dropped $37, or 1.2 percent, to settle at $3,043 a tonne, after a rally that lifted prices to $3,128 on Thursday, the highest since August 2011.
Liffe September cocoa fell 13 pounds, or 0.7 percent, to close at 1,910 pounds a tonne, consolidating after sharp gains last month on global deficit forecasts. "We're waiting to see if it's creating a top or consolidating ahead of a further leg up, but at present, it isn't clear," a UK-based broker said. The ICE July raw sugar contract closed down 0.04 cent, or 0.2 percent, at 17.81 cents a lb. The contract will expire on June 30. "This inability to continue upward may just be a period of consolidation," said Nick Penney of brokerage Sucden Financial. Liffe August white sugar was firm, ending up 30 cents, or 0.06 percent, at $490.10 a tonne.
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