Arabica coffee sinks

Arabica coffee futures on ICE dropped more than 4 percent on Friday, pressured by the falling currency in top grower Brazil and weakness in larger commodity markets that took prices low enough to trigger technical selling. Raw sugar futures firmed slightly after its tumble in the prior season was viewed as overdone. Still, the sweetener which is also turned into the alternative fuel ethanol, has slid this week along with crude oil to notch its biggest weekly drop since mid-September.
Cocoa markets ended little changed, recovering from an early slide of more than 1 percent. The 19-market Thomson Reuters CoreCommodity Index fell 1.1 percent to a 13-year low as oil prices slid to seven-year lows. ICE March arabica coffee settled down 5.15 cent, or 4.1 percent, at $1.212 per lb, its biggest drop in nearly two months, pressured by the Brazilian real's sharp decline against the US dollar.
It is a "risk-off day on a market that had a 10-cent rally but did not find new buyers to take it even higher," said Rodrigo Costa, director of coffee for Societe Generale in New York. The benchmark arabica contract rallied roughly 10 cents to a seven-week high in the first week of December as the real strengthened. After settling just below the 100-day moving average on Thursday, technical selling helped push March arabica well below its 50-day moving average.
Robusta coffee futures also fell, with January closing down $23, or 1.5 percent, at $1,499 per tonne. Dealers said high stocks in ICE-approved warehouses continued to weigh on prices. Raw sugar futures turned slightly higher, though the spot contract slipped below the 50-day moving average for the second straight day.
"Weather continues rainy in center-south Brazil cane areas and in southern ports, increasing waiting time for loading," said Nick Penney, a senior trader with Sucden Financial Sugar. "Elsewhere, crops continue to be affected by the El Ni?o effect with rain delays and dry conditions affecting producers in Central America and Thailand." March raw sugar settled up 0.03 cent, or 0.2 percent, at 14.58 cents per lb, while March white sugar futures settled up $1, or 0.3 percent, at $399.20 per tonne. London March cocoa settled down 1 pound, or 0.04 percent, at 2,278 pounds per tonne, with the spot spread bouncing up from Thursday's contract low. March New York cocoa settled up $6, or 0.2 percent, at $3,353 per tonne.