LONDON: Arabica coffee futures on ICE hit a four-month high on Monday as the Brazilian real hit a six-week high versus the dollar, discouraging producer selling.
COFFEE
July arabica coffee rose 0.7 cents, or 0.7pc, to $1.05 per lb at 1334 GMT after peaking at $1.057, the highest since early Feb.
Arabica surged 13.9pc in May in its biggest monthly percentage jump in two years. In April, prices crashed to a 13-1/2-year low of 86.35 cents.
Speculators reduced their net short position in arabica coffee in the week to May 28 to the smallest number since February, government data showed.
"We've just started the frost season in Brazil. Any hedge fund that's been maintaining short positions will want to tread carefully over the next few weeks," Kona Haque, head of research at agricultural commodities trader ED&F Man, said.
She added: "The real is firming quite a bit and the whole agricultural complex has gotten a new lease of life. The money in this asset class will inevitably filter into coffee."
July robusta coffee was up $7, or 0.5pc, at $1,485 per tonne, having hit its highest since late March. The contract gained 6.5pc in May, following three straight months of declines.
SUGAR
July raw sugar was flat at 12.10 cents per lb.
The contract rose 0.9pc last month, following two straight months of declines.
Speculators increased their net short position in ICE US raw sugar in the week to May 28 to its highest level since September, government data showed.
Dealers said general strength in agricultural commodities should support sugar, adding Friday's settlement above 12 cents could well trigger fund short covering near term.
August white sugar fell $0.9, or 0.3pc, to $329.70 per tonne. Prices gained 6.5pc last month.
COCOA
July New York cocoa fell $43, or 1.8pc, to $2,356 per tonne.
The contract gained 1.4pc last month, its fourth straight month of gains, buoyed by strong demand signals.
Speculators cut their bearish bets in ICE US cocoa in the week to May 28 to the smallest number in more than three months.
The International Cocoa Organization trimmed its forecast for the size of an expected global cocoa surplus in the 2018/19 season to 36,000 tonnes from 39,000 tonnes.
July London cocoa was down 21 pounds, or 1.2pc, at 1,764 pounds per tonne, after hitting a two-week high on Friday.
Rains remained below average last week in most of Ivory Coast's cocoa-growing regions but were more abundant compared to previous weeks, which could boost the mid-crop.
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