Arabica coffee tumbles nearly 7pc on Brazil rains, sell stops

NEW YORK/LONDON: Arabica coffee futures fell nearly 7% on Monday as forecast for rains over parched coffee areas in top producer Brazil led speculators to sell part of their large long position in the futures.

Raw sugar also slipped, heading back towards Friday's 1-1/2 month low as oil prices fell.

COFFEE

December arabica coffee fell nearly 7%, or 9.2 cents, to a low of $1.2285 per lb, retreating sharply from last week's eight-month peak to hit its lowest since late August.

Dealers said forecast for rains over parched coffee areas in the world's largest producer Brazil ignited sell stops among financial investors that had built a large long position in arabica coffee futures in New York recently.

"Once the news on Brazil rains came in and funds started selling, sell stops were hit and the market went down," said one broker.

Farmers in Brazil were concerned last week that a long dry spell would hurt the key flowering period, causing losses for the 2021 crop.

Speculators boosted their net long position in arabica coffee in the week to Sept. 8 by 3,852 to 33,092 contracts.

November robusta coffee fell $41, or 2.8%, to $1,392 a tonne.

SUGAR

October raw sugar was down 0.19 cents, or 1.5%, at 11.74 cents per lb, edging back down towards Friday's 1-1/2 month low.

Speculators reduced their net long position in raw sugar in the week to Sept. 8 by 19,196 contracts to 121,274 contracts.

Dealers said it was unlikely funds would liquidate more longs, while resistance is growing above 12 cents, leaving the market rangebound.

October white sugar, which expires on Tuesday, fell $6.70, or 1.8%, to $350.50 a tonne.

EU sugar production is set to fall to 16.1 million tonnes this year from about 17 million in 2019, after fields were devastated by pests and dry weather.

COCOA

December London cocoa rose 1 pound, or 0.1%, to 1,802 pounds per tonne.

December New York cocoa rose $14, or 0.5%, to $2,562 a tonne.

Cocoa arrivals at ports in world's top grower Ivory Coast reached 2.060 million tonnes between Oct. 1 and Sept. 13, exporters estimated, down 5.4% versus the same period last season.

Speculators increased a net long position in cocoa to 15,710 contracts in the week to Sept. 8.