New York cocoa rebounds; arabica coffee rises

Cocoa futures on ICE turned higher on Wednesday after tapping multi-week lows, erasing most of the prior session's steep losses as fund buying returned to the markets. Arabica coffee also inched higher. July New York cocoa settled up $56, or 2.1 percent, at $2,730 per tonne, after falling to a one-month low at $2,629.
Trend-following fund buying provided a boost, traders said, causing prices to give up much of the prior session's losses. July closed down 3.8 percent on Tuesday, its biggest one-day fall in six weeks. Meanwhile, total open interest dropped just 416 lots to 305,050 lots, ICE data show.
Tuesday's sharp decline was thought to have signaled an end of this year's strong run-up in prices, dealers said, but that may have been premature.
"It's system (funds) that are defending today," one US trader said.
July London cocoa settled up 25 pounds, or 1.3 percent, at 1,895 pounds per tonne, after dipping to a three-week low at 1,844 pounds.
Ivory Coast has sold 1.1 million tonnes of cocoa export contracts for 2018/19 and aims to sell between 1.3 million and 1.4 million tonnes, two senior Coffee and Cocoa Council sources told Reuters.
July arabica coffee settled up 0.35 cent, or 0.3 percent, at $1.173 per lb, trading well within the prior session's range.
Arabica futures were pressured by the weak Brazilian currency against the US dollar, but underpinned by short-covering and chart-based support after failing to revisit the prior session's 3-1/2-week low, traders said.
The market also kept an eye on weather forecasts in top grower Brazil, where temperatures were expected to cool. It is the time of year when frost can occur there, keeping traders on alert.
July robusta coffee settled up $9, or 0.52 percent, at $1,737 per tonne, after falling to a one-month low a day earlier.
"The differentials have firmed and we're not seeing much origin selling down here at these levels," the dealer said.
Espirito Santo state, Brazil's leading robusta coffee producer, has improved its irrigation systems and farmers have added new crops to revive agriculture in the region after a devastating drought in 2015 and 2016. July raw sugar settled up 0.09 cent, or 0.8 percent, at 11.61 cents per lb. August white sugar settled up 10 cents, or 0.03 percent, at $322.50 per tonne.