Arabica coffee crashes to fresh 13-year low

NEW YORK/LONDON: Arabica coffee futures on ICE plunged to a new 13-year low on Thursday, as a weaker Brazilian currency compounded the market's challenges with oversupply, while New York cocoa fell as a recent rally lost momentum.

COFFEE

May arabica coffee settled down 4 cents, or 4.2 percent, at 90.25 cents per lb after slumping to 90.15 cents, its lowest in over 13 years.

This was its biggest daily percentage drop since late November, as a weaker currency in top-grower Brazil, the impending options expiry, and continued oversupply dragged the market lower.

The Brazilian real weakened against the US dollar, which can encourage producer selling in the top-grower.

May options expire on Friday, which was pressuring the market, especially given the number of open puts around the 90-cent level, dealers said.

Massive Brazilian exports of both arabica and robusta beans continued to weigh on coffee markets, dealers noted. Brazilian coffee exports last month were 14.2 percent higher than in March 2018, exporters association Cecafé said on Wednesday.

Terra Forte, a top Brazilian coffee exporter, filed for bankruptcy protection in a Sao Paulo state court, lawyers for the company said on Wednesday.

May robusta coffee settled down $16, or 2.3 percent, at $1,392 a tonne, after touching a three-year low of $1,381.

Exports from top robusta producer Vietnam have also been strong.

COCOA

May New York cocoa settled down $55, or 2.3 percent, at $2,388 a tonne after earlier hitting a nine-month high of $2,454.

"We had an outside reversal day down and some longs are taking profits here," and there was now the technical set up for going short, one US trader said.

For the first time in over a week, the market was no longer technically overbought on the relative strength index.

The recent rally has been fueled by speculative short-covering against the backdrop of concerns about dry weather in top grower Ivory Coast.

Still, Ivorian port arrivals so far this season are running well above last year.

May London cocoa settled down 1 pound, or about 0.1 percent, at 1,809 pounds a tonne.

SUGAR

May raw sugar settled down 0.15 cent, or 1.2 percent, at 12.66 cents per lb.

The market continued to struggle to overcome producer selling above 12.80 cents, with a run-up on Wednesday stalling at 12.83 cents.

May white sugar settled down $3.70, or about 1.1 percent, at $323.00 a tonne.

The contract expires on Monday and dealers noted there was little appetite to take delivery.