Arabica coffee futures on ICE US hit a five-week low on Tuesday, as the dollar strengthened and harvests near completion. Raw sugar dipped as earlier fund buying subsided and speculators exited short positions. December arabica coffee settled down 1.05 cents, or 0.8 percent, at $1.2910 per lb, after hitting a session low of $1.2905, its weakest since July 13.
Currency also weighed on prices, as the dollar climbed before a central bank conference this week. As arabica coffee harvests near completion, farmers with ample supplies are making initial sales to processors and attempting to protect themselves, causing early harvest pressure, said Hackett.
Low physical activity in coffee-producing regions and fund-selling also weighed on coffee prices, Gentile said. "They can't sell the coffee, so it's going into the exchange," said Gentile. November robusta coffee settled up $16, or 0.8 percent, at $2,135 per tonne.
October raw sugar settled down 0.01 cent, or 0.07 percent, at 13.51 cents per lb. After more supportive chart signals lifted the market, triggering technical buying in the Monday session, fund buying had mostly subsided by Tuesday amid softening technical signals, while a persistently bearish fundamental picture reinforced negative sentiment, dealers said.
A better-than-expected India crop, the world's largest consumer of sugar, pressured prices, said Shawn Hackett, president of Hackett Financial Advisors in Boca Raton, Florida. "There were some concerns about drought in India, but some very good rains have started to come in and have taken that threat off the table."
Additionally, speculators are trying to exit short positions, Jack Scoville, Chicago-based Price Futures Group president said, adding the threat of more ethanol production and less sugar production also pressured prices. October white sugar settled up $1, or 0.3 percent, at $373.40 per tonne.
December New York cocoa settled down $6, or 0.3 percent, at $1,886 per tonne, after hitting a session low of $1,867 per tonne. A stronger greenback pressured New York cocoa prices and a lack of fresh news, Gentile said. December London cocoa settled up 2 pounds, or 0.1 percent, at 1,497 pounds per tonne, supported by a weakening of the British pound.
Cocoa arrivals at ports in top grower Ivory Coast reached around 1,940,000 tonnes by August 20 since the start of the season on October 1, 2016, exporters estimated on Tuesday, up from 1,449,000 tonnes in the same period of last season.
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