Robusta coffee extends losses to 17-month low, cocoa drops

Robusta coffee futures on ICE fell to a 17-month low on Monday, falling for the eighth straight session on speculative selling and expectations for ample supplies from top grower Vietnam, while cocoa declined on improving production prospects. January robusta coffee settled down $29, or 1.7 percent, at $1,720 per tonne, after falling to $1,717, the weakest for the second position since June 30, 2016.
That extended last week's 4.1 percent decline, when total open interest rose by nearly 7,000 lots to 123,048 lots by Friday, amid selling by speculative funds and Vietnamese producers. "There has been concern that the market can't really hold on to these levels with the new Vietnam crop coming to market," said one dealer. "And quite frankly it's going to be a good crop."
March arabica coffee settled up 0.65 cent, or 0.5 percent, at $1.282 per lb. Sucden Financial forecast a global coffee deficit of 3.6 million bags in 2017/18 following a 300,000 bag surplus.
March London cocoa settled down 28 pounds, or 1.8 percent, at 1,541 pounds per tonne. Prices were weighed by earlier strength in the British pound against the US dollar. March New York cocoa settled down $40, or 1.9 percent, at $2,067 per tonne. Both markets were pressured by signs that output may be higher than previously expected, traders said.
Exporters estimated 2017/18 arrivals at ports in top grower Ivory Coast were starting to catch up to early 2016/17 levels at 442,000 tonnes by November 26, versus 487,000 tonnes in the same period of the previous season. "Good arrivals, beneficial weather and some have been talking up the supply side," one US trader said, pointing to talk of a larger-than-expected 2017/18 global surplus.
March raw sugar settled down 0.06 cent, or 0.4 percent, at 15.39 cents per lb, after matching Friday's six-month high of 15.49, which could potentially be viewed as a technical resistance level. The market shrugged off data showing Brazilian mills continued to give priority to ethanol production over sugar in the first half of November as sales of hydrous ethanol in Brazil surged 36 percent.
The price of the sweetener was on track to finish November up more than 4 percent, following October's 8.9 percent rally, on support from increased ethanol production from cane. March white sugar settled down $2.30, or 0.6 percent, at $394.80 per tonne.