Arabica coffee futures came off their highs on Tuesday, but steadied near a four-month peak as speculators ran into chart resistance and favourable weather in top-grower Brazil pressured prices, while New York cocoa rose to a three-week high as a softer US dollar encouraged renewed fund buying.
December arabica coffee settled down 1.7 cents, or 1.4 percent, at $1.1765 per lb., earlier touching $1.20, its highest since June.
Dealers said speculative buying resumed on Tuesday after a sharp rally in the previous session, although momentum now stalled as the market become overbought and ran into chart resistance.
"We hit resistance at $1.20. The market might be taking a pause and wondering if there's a reason to move higher unless the (Brazilian) real will break out and move higher," said Shawn Hackett, president of Hackett Financial in Boca Raton, Florida.
Weather in Brazil pressured coffee prices, but supported positive growth conditions, traders added.
"The flowering stage will be supported by abundant showers" in Brazil, said weather service Radiant Solutions in a note.
January robusta coffee settled up $3, or 0.2 percent, at $1,755 per tonne, earlier hitting its highest level since late May, $1,762.
December New York cocoa settled up $53, or 2.5 percent, at $2,194 per tonne, after earlier rising to $2,222, its highest level since Sept. 25.
Dealers said the weaker dollar supported, which fell to its lowest since late September on Tuesday.
"Demand is also overwhelming supply of the market and it makes the market move higher," Hackett added.
December London cocoa settled 20 pounds higher, up 1.3 percent, at 1,589 pounds a tonne.
However, dealers said market focus remained on signs of a strong start to the main crop season in top grower Ivory Coast.
Market participants are also awaiting third-quarter grind data from North America, due on Thursday, with dealer expectations for a broadly flat or slightly negative figure.
March raw sugar settled down 0.18 cent, or 1.3 percent, at 13.25 cents per lb, retreating from the prior session's seven-month high. December white sugar settled down $4.30, or 1.2 percent, at $366.50 per tonne.
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