ICE arabica coffee futures flirted with a 17-month low on Friday, weighed down by prospects for a big Brazilian crop, while sugar consolidated lower in choppy trade as dealers monitored weather before the harvest in the centre-south of Brazil. Cocoa was firm after paring losses, consolidating after Thursday's sell-off. Arabica coffee futures crept lower, moving closer to the 17-month low set earlier in the week.
May arabicas on ICE closed down 2.95 cents, or 1.6 percent, at $1.8235 per lb. The contract slid to $1.8105 on Monday, a 17-month low for the second month. The market continued to keep a close watch on the crop outlook in Brazil with an anticipated rise in output mainly reflecting a higher production "on-year" in its biennial crop cycle, dealers said.
Kona Haque, soft commodities analyst with Macquarie Bank, said the arabica market was focused on expectations for a big Brazilian crop and noted that physical demand was subdued. "Roasters aren't buying aggressively," she said. A large Brazil coffee harvest will keep futures in a range of $1.80 to $2 per lb for the next six months at least, the head of Italian coffee roaster Illycaffe said on Thursday.
"Coffee is technically weak so people have been running away from it. It looks to me as if it's risk off," said one New York dealer. Shawn Hackett of Hackett Financial Advisors said in a coffee market report, "Expect a major low in arabica coffee in late spring to mid-summer 2012 in the $1.50/pound to $1.75/pound area." Benchmark Liffe May robusta coffee changed direction and closed up $6, or 0.3 percent, at $2,040 a tonne.
"We're seeing more light selling from producers," said Alex Oliveira, senior sugar analyst at brokerage Newedge USA. May raw sugar on ICE eased 0.09 cent, or 0.4 percent, to finish at 25.41 cents a lb. The contract dipped to 23.26 cents on Monday, the lowest level for the front month since January 13.
London May white sugar futures eased $3.40, or 0.5 percent, to finish at $666.60 per tonne. Cocoa futures on ICE firmed up, consolidating after Thursday's sharp sell-off when the market tumbled more than 5 percent to a one-month low in heavy volume on larger-than-expected global surplus forecast.
May cocoa on ICE rose $35, or 1.6 percent, to end at $2,256 per tonne, while London May cocoa finished up 15 pounds, or 1 percent, at 1,461 pounds. A total of 26,120 tonnes of cocoa were delivered against the March contract on Liffe, exchange data showed on Friday.