Arabica coffee futures on ICE edged higher on Thursday, boosted by a stronger currency in top-grower Brazil, while sugar and cocoa prices slipped. September arabica coffee settled up 1.05 cent, or 1%, at $1.0695 per lb. Prices were lifted by a stronger Brazilian currency. The real shot to a more than four-month high against the US dollar as the Brazilian government made progress toward passing legislation that would overhaul its pension system.
A firmer real can discourage producer selling of dollar-denominated goods. The second position has settled above its 200-day moving average for 12 straight sessions, a supportive signal. The market touched a seven-month peak of $1.1565 on Friday on fears over a weekend forecast for frost in Brazil, but fell back as early assessments suggested only minor crop damage. Brazilian coffee farmers and cooperatives sold large coffee volumes in futures markets, taking advantage of a spike in prices in anticipation of frosts in producing regions last weekend, according to producers and market operators.
September robusta coffee settled down $3, or 0.2%, at $1,427 per tonne. October raw sugar settled down 0.12 cent, or 1%, at 12.38 cents per lb. Prices have remained within a range of 12.25 to 12.82 so far this month. Supplies remained ample, although a weak monsoon in India had helped underpin prices. India is likely to get below-average rainfall in the next two weeks, a weather department official said. The US Department of Agriculture (USDA) raised its outlook for domestic sugar stocks as it sharply reduced its forecast for imports from Mexico for 2019/20.
August white sugar settled down $3.70, or 1.2%, at $317.70 a tonne, after falling to a nine-month low of $317, pressured by the ongoing roll, dealers said. "With the fund net short having grown to a new record of 24,400 lots as of last Tuesday's close ..., that is generating an increased focus - and it will be interesting to see by how much they have changed in the last week when the new COT report is published tomorrow afternoon," James Liddiard, senior vice president at consultancy Agrilion, said in a note.
September New York cocoa settled down $18, or 0.7%, at $2,491 per tonne, retreating further from Friday's one-year high. September London cocoa settled down 22 pounds, or 1.2%, at 1,854 pounds per tonne. The market's has been buoyed by top producers Ivory Coast and Ghana to increase the price paid for their cocoa to help combat farmer poverty.
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