LONDON: Arabica coffee futures on ICE fell on Wednesday, pressured by fund selling and prospects for better weather in top grower Brazil, while white sugar touched a fresh 2-year low.
COFFEE
March arabica coffee was down 2.30 cents, or 1.7 percent, at $1.3355 per lb by 1407 GMT.
Dealers pointed to speculative selling as the market waited to see if forecasts for crop-friendly rains in Brazil would materialise.
"The funds have already covered quite a lot of shorts," said one dealer. "And in Brazil, with the rains starting potentially in October, that's obviously leading the market lower."
Demand from roasters was also sluggish amid ample nearby supplies, dealers said.
A weaker Brazilian real also weighed, they said. A decline in the real encourages producers to sell more coffee by increasing their returns in local currency.
November robusta coffee fell $28, or 1.4 percent, to $1,971 a tonne.
"The Vietnam new crop is around the corner," the dealer said, noting there was still uncertainty over whether rains would delay shipments of early beans.
SUGAR
December white sugar was up $0.10, or 0.03 percent, at $355.70 a tonne, after hitting $353.30, its weakest since September 2015.
Prices have been pressured by persistent selling by both funds and European producers, who are poised for a sharp increase in output as quotas are removed from Oct. 1.
"The market is primarily being beaten up by the amount of hedging that's going into it," said one dealer.
March raw sugar was down 0.12 cents, or 0.9 percent, at 13.79 cents per lb, after falling to 13.72 cents, its lowest since June 30.
The October contract, which expires on Friday, still had open interest of 41,275 lots as of Sept. 26.
"It seems Oct NY expiry may be a large one and, as usual, homes will have to be found for the raws at a time when refiners margins are being cut by the low whites premium," said Nick Penney, senior trader at Sucden Financial.
COCOA
December New York cocoa rose $32, or 1.6 percent, to $2,003 a tonne, supported by more friendly technicals.
December London cocoa was up 17 pounds, or 1.2 percent, at 1,490 pounds a tonne.
Ivory Coast is expected to set the minimum price paid to farmers at between 750 and 800 CFA francs ($1.38-$1.47) per kilogram for the 2017/18 main crop, sources said on Wednesday.
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