Arabica coffee hits lowest in ten sessions; sugar also down

NEW YORK/LONDON: Arabica coffee futures on ICE traded at their lowest in 10 sessions on Friday, weakened by broad-based losses in commodity markets and sentiment that frost-related crop losses in Brazil may not be as severe as initially feared. Sugar and cocoa prices also fell.

COFFEE

December arabica coffee was little changed at $1.815 per lb after falling to as low as $1.7810/lb earlier in the session. Dealers said the market continued its pullback from a near seven-year peak set on July 26 that followed concerns frosts in Brazil had done extensive damage to crops.

"It seems that the worst fears about the frost-related losses to the coffee crop in Brazil have not been confirmed," Commerzbank said in a market update, noting a forecast by TRS that probable losses would be about 4%.

Rabobank said in a note that it is still early to have a clear idea of what the damage will be to Brazilian production. November robusta coffee settled up $19, or 1.0%, at $1,882 a tonne.

SUGAR

October raw sugar? settled down 0.21 cent, or 1.1%, at 19.58 cents per lb, having hit a week low earlier in the session. Dealers said the market was suffering a short-term setback after climbing to a 4-1/2 year peak of 20.37 cents on Tuesday but remained underpinned by the prospect of lower production in Centre-South Brazil this season.

"The market was hit by spec liquidation as inflation ideas were moderated. The problem with sugar is we are top heavy. This leaves the market vulnerable to a spec selloff," said a US broker. Raw sugar is forecast to end this year with an annual gain of more than 30%, a Reuters poll showed on Friday. October white sugar fell by $5.50, or 1.1%, to $489 a tonne.

COCOA

December New York cocoa fell by $61, or 2.3%, to $2,567 a tonne, extending its retreat from an eight-month peak of $2,681 set on Wednesday. Dealers said the market had derived support recently from signs that demand is recovering from a COVID-19 related slump but supplies remain ample following larger crops in both Ivory Coast and Ghana in the current 2020/21 season. December London cocoa settled down 11 pounds, or 0.6%, at 1,790 pounds per tonne.