Coffee extends fall, sugar steadies

Arabica coffee futures on ICE fell further on Thursday from this week's two-month high, as forecasts for possible rain later this month in top producer Brazil eased crop output concerns following weeks of dryness. Raw sugar futures pared gains after failing to breach last week's eight-month high, with some pressure coming from earlier weakness in the Brazilian real against the US dollar. Cocoa was little changed ahead of the release of North American third-quarter grind data at 4 pm ET (2000 GMT), is expected to show a year-on-year decline.
In coffee trading, light rain forecasts for the end of the month in Brazil weighed on prices after a rally to an eight-week high earlier this week on concerns about the dryness hampering crop flowering. "While disagreement among ensemble members keeps confidence low, models are increasingly supportive of enhanced tropical support that would trigger needed rains for ... much of coffee (areas)," Commodity Weather Group said in a research report.
December arabica settled down 0.95 cent, or 0.7 percent, at $1.337 per lb. November robusta coffee settled up $36, or 2.2 percent, at $1,667 per tonne. ICE March raw sugar settled up 0.04 cent, or 0.3 percent, at 14.13 cents per lb. The contract peaked at 14.38 cents, just shy of Friday's eight-month high of 14.43 cents. Dealers said the market had been supported by wet weather in Brazil that has hampered cane harvesting, although conditions looked set to improve.
"Weather forecasters expect largely seasonable rain in south Brazil's cane regions for the next week or so," Commonwealth Bank of Australia analyst Tobin Gorey said. "The drier bias should allow some of the damper parts of the region to dry down. That might not be soon enough though to boost sugar recoveries for a significant part of the crop as we are nearing the point where the cane crush will start to decline."
December white sugar settled up $2.10, or 0.5 percent, at $388.60 per tonne. Cocoa futures were lower ahead of the release of third-quarter North American grind data later in the day, which is expected to show a year-on-year decline of between 2 and 10 percent from last year's record high. New York December cocoa settled down $5, or 0.2 percent, at $3,104 per tonne, while London December cocoa closed down 7 pounds, or 0.3 percent, at 2,101 pounds a tonne.