Arabica coffee prices inch up after setting six-week low

Parvez Jabri August 1, 2019

NEW YORK/LONDON: Arabica coffee futures on ICE settled higher on Wednesday, rebounding off a six-week low, while New York cocoa fell for the seventh straight session.

COFFEE

* September arabica coffee settled up 0.15 cent, or 0.2%no, at 99.65 cents per lb, after hitting 98.40, a six-week low.

* Prices were supported by a stronger currency in top-grower Brazil, dealers said, which can discourage producer selling.

* Dealers said they were continuing to track forecasts for cold weather in top-grower Brazil for this weekend, though it was not expected to be a major threat to crops.

* A frost scare in Brazil in early July sent prices to 2019 highs but prices subsequently fell as crop damage appeared minimal.

* The contract fell 7.9% in July, its fourth negative monthly finish this year.

* The contract drifted lower to new six-week lows in post-settlement trade.

* The bear market may, however, be coming to an end as low prices begin to reduce production, broker Marex Spectron said in a report.

* Second month prices are likely to recover to $1.15-$1.20 in the medium-term, Marex Spectron said, compared to a $1.0330 settle on Wednesday.

* September robusta coffee settled down $16, or 1.2%, at $1,338 per tonne.

COCOA

* September New York cocoa settled down $34, or 1.4%, at $2,345 per tonne, pressured by an improving outlook for the main crop in top-grower Ivory Coast.

* Price’s fall through resistance around $2,369, a 50% Fibonacci retracement of the March low and early July high, prompted further losses, dealers said.

* Prices have declined steadily since that early July high to shed 4.3% in the month, its first negative monthly finish in six.

* September London cocoa settled down 22 pounds, or 1.2%, to 1,825 pounds a tonne. The contract rose 3% in July.

* Ivory Coast’s raw cocoa exports rose 7.1% between Oct. 1 and June 30, while its exports of semi-finished cocoa products climbed 5%, provisional port data showed.

SUGAR

* October raw sugar settled up 0.06 cent, or 0.5%, at 12.21 cents per lb.

* Prices were supported by stronger oil prices, dealers said, encouraging cane mills to produce ethanol rather than sugar.

* The inadequacy of the monsoon rains in India, a top grower, have underpinned the market recently. The situation is set to improve in the coming weeks, however, and the rains are likely to make up for the earlier shortfall, a government forecaster said on Wednesday.

* On the month, prices declined 0.9%.

* October white sugar settled up $1, or 0.3%, at $324 per tonne.

Copyright Reuters, 2019

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