ICE coffee drops

ICE arabica coffee reversed from a three-week high on Tuesday as technical weakness, sell-stops, and forecasts of rains in top producer Brazil cut the momentum of a recent short-covering rally. Raw sugar on ICE Futures US gave back some of Monday's gains on expectations that Brazil industry data this week will again show a pick-up in harvesting, while cocoa crawled higher.
ICE September arabica coffee climbed as high as $1.736 a lb before dropping as much as 3.6 percent. It settled down 4.60 cents, or 2.7 percent, at $1.6830 per lb. Last week's short-covering rally was stemmed by forecasts of rain this week for coffee-growing regions of Brazil that were plagued by drought earlier this year, said Rodrigo Costa, director of coffee for Newedge USA in New York.
This year's crop in top grower Brazil was 74 percent harvested by mid-July compared with 56 percent a year ago, local crop analysts Safras e Mercado said. Safras said producers have sold 30 percent of the crop, versus 23 percent a year ago. The data indicates the bulk of producer selling has yet to hit the market.
Liffe September robusta coffee fell $22, or 1.1 percent, to finish at $1,993 a tonne. Spot October ICE raw sugar futures eased 0.12 cent, or 0.7 percent, to settle at 17.16 cents a lb, after notching their biggest one-day gain since June on Monday. Liffe October white sugar fell $3.80, or 0.8 percent, to close at $452.00 per tonne. The possibility of El Nino weather conditions and a drought earlier this year in top producer Brazil have raised the prospect of lower-than-expected supplies after four years of surplus. But in the short term, supplies appear plentiful.
"The rapid progress of the crush in Brazil is aiding bearish sentiment, because it is bringing more sugar to the market in the short run," Stefan Uhlenbrock, senior soft commodities analyst with F.O. Licht, said. Uhlenbrock said he expected Unica cane industry data this week to show a strong crushing pace in center-south Brazil in the first half of July due to favorable weather. ICE September cocoa closed up $3, or 0.1 percent, at $3,131 per tonne, while Liffe December cocoa edged up 5 pounds, or 0.3 percent, to settle at 1,925 pounds a tonne. Second-quarter grinding in Asia and North America both picked up sharply year-over-year, industry association data showed last week. The signs of strong demand offset pressure from recent rains in Ivory Coast expected to boost main crop supplies.