NEW YORK/LONDON: Arabica coffee futures rallied nearly 4 percent to a seven-week high on Thursday, buoyed by an improving technical outlook and concerns about early flowering of crops in top producer Brazil.
Raw sugar futures moved sharply in the opposite direction to a three-week low, falling for the third straight day on pressure from plentiful nearby supplies and sluggish physical off take. December arabica coffee settled up 4.35 cent, or 3 percent, at $1.514 per lb.
The contract rose by as much as 3.9 percent to its highest since July 15 at $1.528 after buy stops were triggered around $1.475, attracting speculative buying, traders said.
Technically, the market was looking more positive, having broken above the trading range from the past six weeks and rising further away from moving averages.
"When we broke through $1.4780 in New York (arabica), it got specs buying again.
At the moment, technicals are looking quite good," one London trader said.
Widespread rains across the southern half of the main arabica region in Brazil are triggering early blooms on trees, which will form the first beans to mature for the 2017 harvest.
Traders said this raised concerns about Brazil's 2017-18 crop because some flowers may be lost if the buds open too early and consequently reduce bean output.
Robusta coffee futures also rose, with November closing up $24, or 1.3 percent, at $1,852 per tonne.
Dealers said the robusta market was supported by tightening supplies following a slowdown in shipments from crucial producers such as Vietnam and Indonesia.
The International Coffee Organization said that July robusta exports were 26.2 percent below levels a year earlier.
So far this season, robusta shipments have dropped 8.2 percent.
October raw sugar settled down 0.47 cent, or 2.3 percent, at 19.59 cents per lb.
"The latest Williams report shows a dramatic drop of 636,000 tonnes in the raw sugar line-up to just under 940,000 tonnes," said Agrilion Commodity Advisers, referring to a sign of falling physical demand for sugar to be shipped from top grower Brazil.
The weak session caused October's discount to March to widen sharply to a 0.59 cent discount, the biggest since February, reflecting the bearish short-term fundamentals. October white sugar settled up $1.70, or 0.3 percent, at $530.80 per tonne.
December London cocoa settled down 34 pounds, or 1.5 percent, at 2,274 pounds per tonne, while December New York cocoa settled down $1, or 0.03 percent, at $2,897 per tonne.
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