Arabica coffee climbs to 3-month peak, sugar also up
- March New York cocoa settled down $24, or 0.9%, at $2,517 a tonne.
- March robusta coffee settled up $6, or 0.4%, at $1,378 a tonne.
- March arabica coffee settled up 1.95 cents, or 1.6%, at $1.266 per lb.
NEW YORK/LONDON: Arabica coffee futures on ICE rose to a three-month high on Wednesday, buoyed by supportive technicals and a lack of selling by producers, while raw sugar prices also advanced on a day when the Indian government finally decided on subsidies for exports.
COFFEE
March arabica coffee settled up 1.95 cents, or 1.6%, at $1.266 per lb after climbing to a three-month peak of $1.2860 earlier in the session.
Dealers said technical indicators were mostly bullish after the market's recent improved performance.
"We expect futures to push higher in the near term but remain below the key resistance at $1.30," Sucden Financial said in a technical note on Wednesday.
The market has also been given a boost this week by a strengthening Brazilian real, which curbs producer sales by making dollar-denominated prices less attractive in local currency terms.
The prospect of a significant decline in production in top producer Brazil in 2021 provided background support.
March robusta coffee settled up $6, or 0.4%, at $1,378 a tonne.
SUGAR
March raw sugar rose 0.28 cent, or 2%, to 14.49 cents per lb with the market regaining some ground after finding support at a low of 14.09 cents on both Monday and Tuesday. Those lows were the weakest level since late October.
Dealers said India's decision to subsidize exports had been largely anticipated, but most were expecting a larger subsidy value per tonne of sugar.
India's Cabinet on Wednesday approved a subsidy to encourage cash-strapped mills to export 6 million tonnes of sugar in the 2020/21 year, which started on Oct. 1.
March white sugar rose $6.30 to $398.80 a tonne.
COCOA
March New York cocoa settled down $24, or 0.9%, at $2,517 a tonne.
Dealers said an improving outlook for Ivory Coast crops after recent rain and concerns that measures to slow the spread of COVID-19 could curb demand further contributed to market weakness.
March London cocoa settled down 26 pounds, or 1.5%, at 1,688 pounds per tonne.
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