LONDON: Arabica coffee futures on ICE hit a two-week low on Tuesday as concerns over bad weather in top grower Brazil faded while the market's technical structure prompted funds to resume selling.
COFFEE
July arabica coffee fell 0.76 cents, or 0.76pc, to 97.85 cents per lb at 1116 GMT, after hitting a two-week low.
Prices hit a four-month high early last week, but later plunged as fund short covering ran out of steam, weather concerns dissipated and the Brazilian real weakened.
A weak real encourages producer selling of dollar-priced coffee.
"The market has one of the best carries of any agricultural commodity, it pays to be short really. There's no weather risk, so selling has returned," said a dealer.
He added there was nothing to stop arabica trading back down at 95 cents, but below 90 prices were nearing production costs.
Brazil exported 2.82 million bags of arabica beans in May, 95pc more than in May last year, while shipments of robusta coffee jumped more than 700pc to 376,257 bags.
July robusta coffee fell $7, or 0.5pc, to $1,408 per tonne, having hit a two-week low.
Vietnam, the world's top robusta producer, exported 146,220 tonnes of coffee in May, up 2pc from April. For the first five months, robusta exports were down 11.8pc from a year ago.
SUGAR
July raw sugar was down 0.10 cent, or 0.8pc, at 12.30 cents per lb.
The contract rose 3.3pc last week for its third straight positive weekly finish, but has struggled so far this week.
"The market's inability to even test last week's months high is beginning to weigh. Producers appear to have been holding off selling hoping for a continuation of the rally.
As this is beginning to appear unlikely, they are likely to lower their sell levels," said a dealer.
The ISO on Monday forecast a global sugar surplus of 1.83 million tonnes in the 2018/19 season, up from a previous estimate of 641,000 tonnes.
A deficit of 3 million tonnes was forecast for the 2019/20 season.
August white sugar was down $0.10, or 0.03pc, at $333.80 per tonne.
COCOA
July New York cocoa was up $6, or 0.2pc, at $2,550 per tonne, having touched its highest in about a year on Monday.
Cocoa prices have been buoyed by strong global demand.
Ghana's cocoa purchases reached 744,775 tonnes between Oct. 1 and April 30, down 1pc from the year-ago period.
July London cocoa rose 14 pounds, or 0.8pc, to 1,846 pounds a tonne.
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