Arabica coffee sinks

Arabica coffee futures on ICE sank 4.3 percent to a three-week low on Wednesday on forecasts for much-needed rain in top grower Brazil and chart-based sell signals. Raw sugar on ICE Futures US inched higher while cocoa was mixed. Arabica coffee futures eased on forecasts for rain in Brazil's growing region while traders remained uncertain about whether the 2015/16 crop has already been irreparably damaged by the combination of drought earlier in the year and a recent dry spell.
Rain should spread out over all of Brazil's coffee, sugar and grain-growing areas starting Monday and lasting to the end of the month with the arrival of a new cold front, Brazil-based Somar meteorologists said. December arabica coffee on ICE closed down 8.50 cents, or 4.3 percent, at $1.9110 per lb. November robusta coffee ended down $21, or 1 percent, at $2,025 a tonne. The contract triggered technical selling late in the session after falling below the prior session's low at $1.9180, traders said.
Raw sugar futures on ICE edged higher, with one broker attributing the rise in the market to a forecast by commodities market analyst Datagro that drought would reduce Brazilian sugar output. "Comments accompanying the report suggest Datagro expects that the cane in center-south Brazil is not expected to recover fully for next season," the broker said.
March raw sugar on ICE settled up 0.06 cent, or 0.4 percent, at 16.50 cents a lb, while December white sugar rose $2.30, or 0.5 percent, to finish at $424.40 a tonne. A second London broker said Brazilian cane industry (Unica) data for center-south production in the first-half of October was expected on Thursday. He expected a bigger allocation of cane to sugar instead of ethanol as production of sugar is more remunerative.
The broker said he expected the data to show a high cane crush figure because of the recent dry weather. December cocoa on ICE closed up $3, or 0.1 percent, at $3,113 a tonne, while London December cocoa gained 6 pounds, or 0.3 percent, to end at 2,029 pounds a tonne.
"The prospects for production in Ivory Coast and Ghana, the top growers, are looking reasonably good," said Hamish Smith, commodities economist with Capital Economics. Dealers said that Asia's third-quarter cocoa grind, expected to be issued on Thursday, is likely to show a year-on-year decline and that a further drop could follow in the fourth quarter.