Arabica coffee futures on ICE fell on Friday on a weaker currency in top grower Brazil and the front-month contract posted a weekly loss for the first time in seven weeks, while raw sugar slipped. March arabica coffee settled down 2.2 cents, or 2.1 percent, at $1.037 per lb., after touching $1.07 cents per lb, the highest since Jan. 25.
On the week, the contract lost 2.9 percent, its first negative finish in seven weeks. In the previous session, prices had rallied 3.7 percent on a short-covering rally on the back of a firming Brazilian real, dealers said. As the real weakened on Friday, however, arabica prices fell alongside it.
A weaker real improves local returns on dollar-traded commodities such as coffee and sugar, encouraging producer selling. Thursday "was a pure short-covering rally ... Today was a disappointment technically because we couldn't take out the (Jan. 25) $1.0715 high. We traded up to $1.07 and then sold off," said one US trader.
March robusta coffee settled down $4, or 0.3 percent, at $1,547 per tonne after touching a Dec. 3 high of 1,592 ahead of next week's holiday in top grower Vietnam. Coffee shipments from Vietnam are expected to fall sharply next week on the Lunar New Year holiday.
March raw sugar settled down 0.13 cent, or 1 percent, at 12.60 cents per lb, also pressured by the weaker currency in top grower Brazil. On the week, the contract gained 1.3 percent. Total open interest jumped the previous session by 16,056 lots to 941,928 lots, its highest since early September, ICE data show. This indicated new length in the market, dealers said.
The world sugar market is on course for a shortfall of 1.36 million tonnes (raw value) in 2019-20, analyst Green Pool said on Friday in its first forecast of the season. March white sugar fell $3.50, or 1 percent, to $337.80 a tonne. It earlier slipped to its lowest since Jan. 7.
March New York cocoa was unchanged from the previous session, settling at $2,168 a tonne. The previous session, prices touched a seven-week low of $2,161. On the week, the contract declined 2.2 percent, its fifth straight week of losses. May London cocoa settled up 18 pounds, or 1.1 percent, at 1,607 pounds per tonne. The contract shed 0.6 percent on the week. In the prior session, prices fell to 1,585 pounds a tonne, their lowest since Dec. 11.
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