Arabica coffee erases February gains; cocoa, sugar down

09 Feb, 2019

Arabica coffee futures on ICE fell on Friday, pressured by a weaker currency in top grower Brazil and improving weather conditions in the country, while cocoa and sugar also fell.
March arabica coffee settled down 1.7 cents, or 1.6 percent, at $1.026 per lb. The contract largely erased the modest gains it had made so far this month.
On the week, arabica shed 1.1 percent.
Prices were weighed down by a softer currency in top grower Brazil, where the real touched its weakest levels against the US dollar since January 29.
A weaker Brazilian real encourages producer selling by boosting local returns on dollar-traded commodities.
Improving weather conditions in Brazil, where crops had been threatened by dry weather, have also pressured prices, dealers said.
There has been little volatility in the market of late, which has led to more subdued options activity, noted Steve Platt, futures strategist at Archer Financial Services.
March robusta coffee was down $7, or 0.5 percent, at $1,540 a tonne.
"We have the end of the new year holiday in Vietnam this week ... the question is whether we'll see some renewed selling there next week," Platt said.
March raw sugar settled down 0.02 cent, or 0.2 percent, at 12.71 cents per lb.
On the week, the contract gained 0.9 percent.
The contract has been trading in a tight range since the end of January, with the prospect of Indian exports keeping a lid on prices.
Prices were also rangebound ahead of a major sugar conference in Dubai, which starts next week, dealers noted.
March white sugar settled down $3.80, or 1.1 percent, at $333.90 a tonne.
The March contract, which expires on Wednesday, traded at a discount of as much as $10.90 to May, indicating little appetite to take delivery.
Germany's second largest sugar refiner Nordzucker said it had agreed to purchase 70 percent of Australia's Mackay Sugar Limited, giving it access to Australian and wider Southeast Asian markets.
May New York cocoa settled down $19, or 0.8 percent, at $2,235 per tonne.
On the week, the contract rose 1 percent, its first positive weekly finish in 2019.
An improving West African weather outlook has boosted the supply expectations in the top-growing region.
May London cocoa settled down 3 pounds, or 0.2 percent, at 1,667 pounds per tonne.
The weakness of the British pound, which was headed for its worst weekly decline since October, helped underpin London prices, dealers said.

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