Robusta coffee dips, New York cocoa falls

Robusta coffee futures fell more than 3 percent on Wednesday, after a wave of producer hedging halted the market's recent advance, while cocoa prices stumbled on chart-inspired selling and headed for a correction. July robusta coffee settled down $47, or 2.6 percent, at $1,747 per tonne, falling to a session low of $1,740. Dealers said the market's recent advance above $1,800 attracted heavy producer hedging Tuesday, which knocked prices lower and encouraged follow-through selling.
Continued dry weather in Brazil also weighed on prices, said Radiant Solutions' Donald Keeney. "The rains continue to deteriorate in the longer-range forecasts for central and northern Brazil. That region will likely remain on the dry side," he added. Dealers also pointed to the weaker Brazilian real. A weaker real encourages producers to sell dollar-denominated commodities, although it typically affects Brazil's larger arabica coffee market.
"Because there's a good conillon crop this year and there's availability, the real does matter this time around," one dealer said. July arabica coffee settled down 0.85 cent, 0.7 percent, at $1.1875 per lb., seeing a two-week low, $1.1985. "It's in the process of trying to set a base for a rally back," said Jack Scoville, vice president of Price Futures Group.
July New York cocoa settled down $3, or 0.1 percent, at $2,770 per tonne, pressured by speculative selling in modest volumes after prices slipped below technical support levels hitting $2,686, its lowest since April 16. The market has rallied since the start of the year, on momentum-driven fund buying.
"It's a good chance that we'll see a multi-week correction," said Shawn Hackett, president of Hackett Financial Advisors, along with other traders. July London cocoa settled down 10 pounds, or 0.5 percent, at 1,924 pounds per tonne. July raw sugar settled down 0.27 cent, or 2.3 percent, at 11.29 cents per lb.
This unwound some of the gains made Tuesday. "Expectations of high ethanol production continue and some still see this as a potential savior for sugar," Nick Penney, senior trader at Sucden Financial, said in a market update. Louis Dreyfus Co BV projects a sharp drop in the world sugar supply surplus in 2018/19, contrary to many market projections, on expectations that India won't increase from the huge output this year that caught the global sugar trade by surprise. August white sugar settled down $3.70, or 1.1 percent, at $323.90 per tonne.