CALGARY/LONDON: Arabica coffee futures on ICE fell and neared technically oversold levels on Friday, as speculators sold into prices below the cost of production in many countries on expectations for a bumper crop in top grower Brazil.
COFFEE
September arabica coffee settled down 1.65 cent, or 1.5 percent, at $1.099 per lb. This took it to 33.7 on the relative strength index, nearing technically oversold levels.
It closed the week down 3.7 percent, dropping for the sixth straight week.
Speculative selling pressured prices on expectations for a record crop in Brazil.
Total open interest rose to a record 298,763 lots on Thursday, ICE data show.
"I think the speculators are enamored by the prospect that there may never be a shortage in supply again," said Jack Scoville, vice president with Price Futures Group in Chicago.
"The industry has been buying on a scale down basis. There are a lot of perceptions that the Brazil crop is very big and the Vietnamese crop, though it's robusta it's still coffee, is expected to be big," Scoville said.
September robusta coffee settled down $15, or 0.9 percent, at $1,666 per tonne.
SUGAR
October raw sugar settled down 0.12 cent, or 1.1 percent, at 10.96 cents per lb, after falling to 10.91 cents, the lowest for the spot contract since late-April.
The spot contract closed the week down 4.8 percent, its biggest weekly drop since January, pressured by a large global surplus.
"Consumers will start to take an interest now that 2019 and 2020 prices are at new lows. And investors still have a hefty short position that they might want to cash out," said analyst Tobin Gorey of Commonwealth Bank of Australia.
October white sugar settled down $2.3, or 0.70 percent, at $326.7 per tonne.
The premium of August, which will expire on Monday, over October surged above $12, up sharply from $7.60 on July 10 due to tightness in white sugar supplies, traders said.
COCOA
September London cocoa settled up 24 pounds, or 1.3 percent, at 1,835 pounds per tonne, turning higher as the British sterling reversed higher against the US dollar, traders said.
The market awaited next week's second-quarter grind data for Europe, where a year-on-year rise of about 3 percent is expected, with North America processing expected to have been flat to 0.5 percent lower.
September New York cocoa settled up $28, or 1.1 percent, at $2,513 per tonne.
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