Arabica coffee futures on ICE took their biggest one-day tumble in a month on Friday, falling on the expectation that exports from Colombia will normalise after a truckers strike ended and as automatic sell orders were triggered. Sugar prices turned higher but remained within this week's range just above a three-week low, and New York cocoa dropped along with the British pound. September arabica settled down 4.95 cents, or 3.37 percent, at $1.419 per lb, after falling 4.4 percent to $1.4035, the lowest since July 6.
Colombia's government and truckers unions reached a deal on Friday to lift a 45-day strike that has snarled coffee exports. "That's probably one of the main reasons," said Nick Gentile, managing partner of commodity trading adviser NickJen Capital in New York, referring to arabica's weakness. "These algos that trade off of news are probably the sellers of coffee today."
Traders said that losses were extended due to sell stops below $1.44, with $1.40 seen as technical support. September robusta settled down $30, or 1.7 percent, at $1,788 per tonne. In sugar, the vigorous cane crush in center-south Brazil weighed on prices for most of the session while dealers said the large net long position was in the hands of speculators, raising risks of a selloff.
"People are nervous that if they start to liquidate, the market could collapse," one trade source said. US Commitments of Traders data is due later on Friday. However, sugar market fundamentals remain bullish, dealers said, referring to a shift of the global market into deficit after years of surpluses. October raw sugar on ICE settled up 0.03 cent, or 0.15 percent, at 19.59 cents per lb. October white sugar settled down $1.90, or 0.35 percent, at $537.80 per tonne.
London cocoa firmed, supported by a drop in sterling after surveys showed business activity had wilted following Britain's vote to leave the European Union. September London cocoa settled up 22 pounds, or 0.93 percent, at 2,384 pounds per tonne. The New York September contract, which is traded in US dollars, settled down $16, or 0.55 percent, at $2,886 per tonne. The spot contract closed the week down 5.8 percent, its biggest drop since January. Cocoa processing in Asia rose 2.8 percent in the second quarter year-over-year, climbing for the third straight quarter, industry data showed. Traders said this was below expectations of around a 5 percent gain.