NY coffee ends at 6-1/2-month low; cocoa, sugar down

NEW YORK: Arabica coffee futures closed at a 6-1/2-month low on Monday despite a recent frost in top grower Brazil, weighed down by the commodity-wide selling spree as investors fled risky assets.

Raw sugar futures fell 2 percent to close at the lowest in seven weeks, while US cocoa was modestly lower as it continued to see heavy volume as index funds rolled out of September into December.

The Reuters-Jefferies CRB index fell 2 percent to the lowest level in nearly eight months on heavy risk-averse selling after the United States lost its AAA credit rating on Friday, increasing concerns about economic growth.

RAW SUGAR

Key October raw sugar futures fell 0.56 cent, or 2 percent, to finish at 26.98 cents a lb, the lowest settlement for the spot contract since June 17.

Market hammered by same liquidation pressure sparked by US credit downgrade - analysts.

Sugar sinks to trade at lowest level since July 1, preliminary Thomson Reuters data.

"I think we'll make our lows early in the week," said The Price Group senior analyst Jack Scoville.

One factor supporting sugar is small Brazil crop.

But Scoville said once Brazil is priced in, the market is still looking at plentiful supplies down the road.

COFFEE

December arabica coffee futures dropped 3.80 cents, or 1.6 percent, to settle at $2.3420 per lb, the weakest settlement for the second position since Jan. 25.

Damage from a frost that swept over Brazil's southeastern coffee belt on Friday was seen as light in at least some key growing areas - two cooperatives in the south of Minas Gerais state.

Market ignored any frost concerns that caused the market to rally Friday, and fell on risk-averse selling that hit the commodity complex - traders.

Heavy September/December spreading continued ahead of first notice day Aug. 23 - traders.

Brazil's southeastern coffee belt will stay frost free throughout the week despite colder temperatures expected by the end of the week - forecaster Somar.

ICE certified arabica stocks flat at 1,525,063 bags on Aug. 4, with 7,325 bags pending grading - ICE data.

COCOA

Key December cocoa futures finished down $30 at $2,945 a tonne, an inside day.

Heavy September/December position rolling continued as the index fund roll was in full force ahead of the September contract's first notice day Aug. 18 - traders.

Total volume neared 33,124 lots, just over double the 30-day average - preliminary Thomson Reuters data.

Market's losses were limited, compared with other markets that tumbled, as it was already trading at the lower end of its selling range after falling 10 percent in the past three weeks - traders.

Cocoa arrivals at ports in top grower Ivory Coast reached around 1,382,000 tonnes by August 7, some 25 percent ahead of the same period last season - exporters.

Cocoa purchases declared by private buyers to Ghana's industry regulator Cocobod reached 71,202 tonnes by Aug. 4 since the start of the 2011 light crop season - industry data.

Copyright Reuters, 2011