NEW YORK/LONDON: Arabica coffee futures on ICE reached a one-month high on Wednesday on technical buying, short covering and dry weather in top-grower Brazil's growth regions.
New York cocoa futures rose as technical structure improved when prices topped a key resistance level.
COFFEE
December arabica coffee settled up 2.8 cents, or 2.1 percent, at $1.3785 per lb, after technical buying lifted prices to $1.3830, the highest level since Aug. 15.
Short covering linked to "general exhaustion to the market on the downside" and dry weather in Brazil helped boost prices, said Stephen Platt, futures strategist at Archer Financials in Chicago.
"Below-normal rainfall is expected across the majority of the coffee belt" in Brazil for the next six to 10 days, Maryland-based meteorologist MDA Information Systems said in a daily report.
A strong close the previous session improved technicals and paved the way for chart-based speculative buying, dealers said.
November robusta coffee settled up $34, or 1.7 percent, at $2,003 per tonne after hitting a one-week high at $2,006.
COCOA
December New York cocoa settled up $39, or 2 percent, at $1,990 per tonne, after hitting a two-week high at $1,995.
The technical structure improved when prices rose above a Sept. 5 high of $1,982, triggering buy stops and speculative short covering, said Boyd Cruel, commodity broker for High Ridge Futures in Gilbert, Arizona.
"If we can get a close above there or the previous high on Aug. 28 of $2,002, we could see more technical buying," Cruel said.
December London cocoa settled up 33 pounds, or 2.2 percent, at 1,509 pounds per tonne.
"There's talk that demand could be better and that's what's been supporting the market in the past week, an outlook for better demand," Cruel added.
A buoyant broader commodity markets also provided support.
SUGAR
October raw sugar settled up 0.31 cent, or 2.2 percent, at 14.33 cents per lb.
Global raw sugar prices remaining below the ethanol parity in Brazil have boosted sentiment.
Rising demand for ethanol in Brazil has lifted prices, encouraging mills to divert cane to production of the biofuel over sugar.
The market has likely established a bottom, said Platt.
"If we can hold the 14.50 area on the downside, you might be able to see market advance in 15.30, 15.50 area," he said.
December white sugar settled up $3.20, or 0.9 percent, at $372.30 per tonne.
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