LONDON: Arabica coffee futures on ICE hit a one-month low on Thursday, pressured by a stronger dollar and sluggish physical demand, while more friendly chart signals helped lift raw sugar.
COFFEE
December arabica coffee was down 2.30 cents, or 1.71 percent, at $1.3220 per lb by 1347 GMT, after hitting $1.3215, its weakest since July 17.
Prices were partly pressured by a weak close in the previous session and a stronger dollar on Thursday.
Dealers said chart support had deteriorated, with speculative short-covering largely exhausted. Physical demand also remained sluggish, further weighing on sentiment.
"We've seen some roasters covering a bit on the spots because of the slow shipments that are coming out of Brazil," said one dealer. "But they've mostly got the cover they need to get through."
The International Coffee Organization raised its forecast for 2016/17 world coffee production to a record 153.9 million 60-kg bags, up from a previous projection of 151.6 million, mostly due to higher output from Indonesia.
November robusta coffee also fell $10, or 0.49 percent, to $2,044 per tonne after hitting a 7-1/2 week low a day earlier.
Discounts for Vietnamese coffee tightened in thin trade with few good quality beans available and farmers holding onto their stocks on expectation that prices would rise in the coming days, traders said on Thursday.
SUGAR
October raw sugar rose 0.17 cent or 1.31 percent to 13.11 cents per lb, rebounding from Wednesday's seven-week low of 12.92 cents.
Dealers pegged much of the recent decline on funds liquidating long positions and said the lack of sizeable new short-selling was seen as supportive, signalling the downside is limited.
However, they noted volumes remain thin and any rally is likely to run into an uptick in producer selling, as many Brazilian mills are still believed to be unhedged for this season's sugar.
Meanwhile, they have hedged around 2.7 million tonnes of the sugar they will produce next year, 15 percent less than the same time a year ago, according to Archer Consultancy.
October white sugar rose $3.90, or 1.08 percent, to $364.90 a tonne, recovering after touching $360.40 on Wednesday, its weakest since September 2015.
COCOA
December New York cocoa fell $2 or 0.11 percent to $1,837 a tonne, after falling to its weakest since July 13 in the previous session.
December London cocoa fell 4 pounds or 0.27 percent, to 1,465 pounds a tonne.
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