Arabica coffee up

Arabica coffee futures on ICE rallied on Thursday on short-covering and a lack of producer selling, as raw sugar futures fell, giving up much of the previous day's advance as buying dried up at key chart resistance and cocoa futures edged higher. The most-active September arabica coffee contract on ICE Futures US jumped 2.75 cents, or 2.3 percent, to settle at $1.249 per lb, rising off this week's 1-1/2-year low of $1.1985.
Traders said that prices holding the $1.20-level contributed to the bounce. "There's not much selling from origin and the speculators are beginning to cover," said Rodrigo Costa, director of coffee for Societe Generale in New York. September robusta advanced $10, or 0.6 percent, to finish at $1,648 a tonne, not far from Tuesday's two-month low of $1,624.
A high front-month premium had traders fixed on the July contract that expires on Friday. Further weakening in the Brazilian real's value threatened to push coffee and sugar to fresh lows, traders said. The weaker currency tends to incentivize selling of the dollar-traded commodities in the world's largest producer of both as it makes them worth more relative to other currencies.
"If the real goes to 3.50 or 3.60 to the dollar, it could push the arabica market down 10 cents (a lb) or so," a physical trader said. Raw sugar futures fell as traders eyed big stocks in India and Thailand and as the prior session's furious buying met resistance at the 11.66-cent level and traders renewed their focus on big stocks in India and Thailand. October raw sugar futures on ICE closed down 0.19 cents, or 1.7 percent, at 11.27 cents a lb.
"We failed at our first attempt" at surpassing resistance, said Phil Pia, a broker with Societe Generale in New York, though he noted bids below the market around 11 cents per lb. October white sugar settled down $3.70, or 1 percent, at $353.50 per tonne. Traders pointed to the strong white premium and higher prices nearby as signs of consumer demand. September New York cocoa edged up to a one-week high before finishing up $4, or 0.1 percent, at $3,221 a tonne. September cocoa futures on ICE gained 5 pounds, or 0.2 percent, at 2,144 pounds a tonne.