Arabica coffee futures on ICE surged on Tuesday to a three-week high as concerns about cold weather in top-grower Brazil helped lift prices through key technical levels, while raw sugar also climbed. September arabica coffee settled up 4.45 cent, or 4.3%, at $1.0745 per lb. The contract touched peaked at $1.0770, a June 5 high. Price gains accelerated as the market rose through resistance at $1.0575, the June 7 high.
The contract has closed higher four of the past five sessions. Prices were buoyed by forecasts that cold weather could develop in southern Brazil late next week, dealers said. Though no frost was predicted, dealers were watching the situation. "The talk of cold weather is getting some shorts a little nervous," said one US trader. "This is a great close. I wouldn't want to go home short. We will have to see if we get some follow through tomorrow."
Dealers were watching the June 4 high of $1.0860 as the next technical objective, as well the $1.0881 area, the 200-day moving average for the monthly contract. September robusta coffee settled up $33, or 2.3%, at $1,455 per tonne, after peaking at $1,468, the highest since June 7. July raw sugar settled up 0.06 cent, or 0.5%, at 12.33 cents per lb.
The market's main focus remained the expiry of the July contract this week, dealers said. The large open interest remaining in July indicated the potential for significant tonnage to be tendered, dealers noted. A weak start to monsoon season in India has given some support to the sugar market, dealers noted. August white sugar settled up $1.10, or 0.3%, at $324.10 per tonne.
Tereos, one of the world's largest sugar makers, is facing a key internal vote on Wednesday that could change the group's strategy, with senior management challenged by cooperative members concerned by a plunge in profit. September New York cocoa settled down $23, or 0.9%, at $2,464 per tonne. Dealers continued to keep a close watch on unseasonably dry weather in top producer Ivory Coast.
Port arrivals in the country reached 2.076 million tonnes for the period between Oct. 1 and June 23, exporters estimated on Monday, up 12% year on year. September London cocoa settled down 12 pounds, or 0.7%, at 1,820 pounds per tonne.
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