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ICE arabica coffee hits 4-week low, sugar dips

ICE arabica coffee eased to a four-week low on Wednesday, dropping for a fourth straight session on pressure from a weak Brazilian currency and expectations for a huge harvest in top grower Brazil.

Raw sugar futures inched lower, weighed down by the soft real and expectations for a big crop in centre-south Brazil.

New York cocoa was little changed near a six-week low, with traders focused on the start of the mid-crops in West Africa after much-needed rains aided development of trees.

Arabica coffee faced downward pressure from expectations for an ample harvest in Brazil, although drought has eroded prospects for the Brazilian robusta, or conillon, crop.

Robusta coffee futures followed arabica lower and were underpinned by concerns over the impact of recent dry weather on crop development in top grower Vietnam.

“It is still early days to assess prospects for the next Vietnamese crop. If they get rains, that could alleviate supply concerns,” said Hamish Smith, commodities economist with Capital Economics.

May arabica coffee was down 0.15 cent, or 0.1 percent, at $1.2075 per lb at 1159 GMT, after falling to $1.2050, the lowest since March 10.

May robusta coffee was up $4, or 0.3 percent, at $1,461 per tonne.

In sugar, traders focused on prospects for a huge harvest in centre-south Brazil, which is now getting under way in favourable weather.

“Once we start getting (industry) numbers updating the progress of the Brazilian harvest in the next couple of weeks, that will have an influence on the direction of the market,” Smith said.

“Expectations for a big harvest would have to contribute (to other factors) to drive prices lower.”

ICE May raw sugar was down 0.01 cent, or 0.1 percent, at 14.63 cents per lb, after touching a low of 14.57 cents a lb, the lowest level since March 10.

ICE May white sugar traded down $0.10, or 0.02 percent, at $419.20 per tonne.

New York May cocoa was down $24, or 0.8 percent, at $2,858 per tonne, having touched a six-week low of $2,841 on Tuesday.

London July cocoa was flat at 2,146 pounds per tonne, having tapped 2,106 pounds per tonne on Tuesday, also a six-week low.

Purchases of cocoa in Ivory Coast’s mid-crop season that starts in April have ground to a halt because of a lack of rain and harsh winds that have also hit quality, farmers and buyers said.

(Reuters)

 

 

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