Arabica coffee hits one-year high as supplies tighten

ICE arabica coffee futures climbed to a one-year high on Monday, boosted by tightening supplies, while producer selling helped to stall the recent run-up in raw sugar prices. March arabica coffee futures were up 1.15 cents, or 1%, at $1.1680 per lb at 1512 GMT after climbing to a one-year peak of $1.1735.

Dealers said the market was supported by tightening certified stocks along with technically-driven buying after the market's recent strong performance. Certified arabica stocks on ICE futures US are at their lowest in nearly a year and a half, having fallen sharply in the past few days.

Arabica supplies are tightening from recent record high levels, with a global deficit forecast for the 2019/20 season, an off-year in top producer Brazil's biennial crop cycle. January robusta coffee rose $14, or 1%, to $1,416 a tonne.

March raw sugar fell 0.01 cents, or 0.1%, to 12.82 cents per lb, hovering just below Friday's peak of 12.87 cents. Dealers said the market was consolidating after rising by about 1.4% on Friday, with producer selling helping to stall the recent run-up in prices.

Fund short-covering has provided support over the past few days. Speculators in ICE raw sugar trimmed their net short position by 39,600 contracts to 133,394 in the week to Nov. 19, data showed. "We still see the possibility of the top of the range being tested but are getting the impression that producers will absorb further short-covering and an incursion beyond 13 cents is looking less likely," said Nick Penney, senior trader with Sucden Financial.

March white sugar rose $2.20, or 0.65%, to $342.10 a tonne. March New York cocoa was up $7, or 0.3%, at $2,624 a tonne, having hit a 1-1/2 year high last week. Speculators in ICE New York cocoa raised their net long position by 14,716 contracts to 36,008 in the week to Nov. 19, data showed.

Cocoa prices have been boosted of late by a strengthening in nearby premiums in both New York and London cocoa, indicating tight nearby supply. The outlook for production in top grower Ivory Coast remains favourable. March London cocoa was down 3 pounds, or 0.2%, at 1,915 pounds a tonne, pressured by a strengthening of the British currency.