Sugar, coffee rise on concerns over Brazil rainfall
- Raw sugar and arabica coffee on ICE firmed on Friday, supported by worries about harvest-hampering rainfall in top grower Brazil, while New York cocoa prices were buoyed by the strong British pound. The soft commodities were largely in line with bigger markets. The 19-commodity Thomson Reuters CoreCommodity Index rose 1.5 percent, rebounding from the prior session's two-week low. Raw sugar futures pared gains late in the session after failing to reach the prior session's 2-1/2-year high of 20.15 cents per lb. July raw sugar ended up 0.08 cent, or 0.4 percent at 19.76 cents per lb after reaching 20.11 cents. It closed higher for the sixth straight week, after rain slowed down the harvest and shipping of cane in Brazil. Expectations that more cane crushing days could be lost in center-south Brazil in June than in May supported futures prices, traders said. "Unica (cane industry association) are expecting rain interruptions to have hampered crushing in the first half of June even more than in the second half of May with an even lower cane crush," said Michael Liddiard, consultant with consultancy Agrilion. Maryland-based MDA Information Services said in a report that while showers in the northeast cane areas may improve moisture for growth there next week, there were concerns they may increase wetness in the main center-south region. The center-south region requires dry conditions to harvest cane. August white sugar settled up $3.80, or 0.7 percent,at $536 per tonne. Arabica coffee futures also rose, supported by worries over the impact of rainfall in Brazil on the quality of beans as farmers harvest the crop. "In Brazil it is raining too much in the arabica areas, and this is definitely causing quality concerns," a European physical coffee trader said. September arabica futures settled up 1.4 cent, or 1 percent, at $1.4285 per lb. September robusta coffee settled up $26, or 1.6 percent, at $1,674 per tonne. New York cocoa futures rose along with the British pound against the U.S. dollar, which pressured the sterling-denominated London market. New York September cocoa settled up $40, or 1.3 percent, at $3,066 per tonne, but made its first weekly drop in four weeks. London September cocoa settled down 1 pound, or 0.04 percent, at 2,268 pounds per tonne. Both markets traded within the prior session's exceptionally large range, when a technical selloff and worries about Britain's future in Europe pushed prices down as much as 6 percent.