LONDON: Arabica coffee futures on ICE rose on Friday boosted by fund short covering and a slowdown in exports from top producer Brazil, while raw sugar and cocoa also edged higher.
COFFEE
September arabica coffee rose 1.85 cents, or 1.4 percent, to $1.3780 per lb at 1428 GMT.
Dealers said the market was supported by fund short covering against the backdrop on some concerns about this year's harvest in top producer Brazil.
"The system funds still have a big short position in arabica and they are covering that position," one dealer said.
The dealer said US Commodity Futures Trading Commission data later on Friday was expected to show speculators with a similar net short to a week earlier when it was 30,740 lots. The data will be for the week to July 25.
Dealers said there were also concerns about Brazil's harvest with small beans and beetle damage among issues. The size of the harvest is also expected to be below last season as it is an off-year in the country's biennial crop cycle.
"All those together means the amount of exportable grade coffee is likely to be smaller," one dealer said.
Arabica prices are expected to rise in the second half of this year, boosted by tightening supplies, a Reuters poll of eight traders and analysts showed on Friday.
September robusta coffee fell $3, or 0.1 percent, to $2,138 per tonne.
SUGAR
October raw sugar was up 0.04 cent, or 0.3 percent, at 14.47 cents per lb.
Dealers said prices had been climbing since early June, boosted partly by a potential rise in the use of cane to produce ethanol rather than sugar in Brazil following tax changes and a rise in gasoline prices.
"A large part of the move has come about by increases in Brazilian domestic gasoline prices, while an increase in fuel taxes has offered further support," ING said in a market note.
October white sugar was off $2.00, or 0.5 percent, at $390.80 a tonne.
COCOA
September New York cocoa was $25, or 1.2 percent, higher at $2,038 a tonne.
Dealers said the market was supported partly by bullish technical indicators after its strong performance on Thursday.
December London cocoa rose by 19 pounds, or 1.2 percent, to 1,599 pounds a tonne.
Comments
Comments are closed for this article.