Arabica coffee climbs to three-week high, sugar edges up

Arabica coffee futures on ICE climbed to a three-week high on Wednesday with the rise gathering momentum after prices broke out of their recent narrow range while raw sugar prices were also higher. July arabica coffee was up 1.20 cents, or 1.0 percent, at $1.2145 per lb at 1426 GMT after climbing to a three-week high of $1.2220.
Dealers said the stronger performance may have been linked to forecasts of colder-than-normal weather in top grower Brazil in late June and early July. They noted the rise prompted some fund short covering.
"We've been flat for the last few days and suddenly had a bit of a bump to the upside so funds are short covering on that," one dealer said. Producer selling could, however, cap the advance with a weak Brazilian real making dollar-denominated prices more attractive in local currency terms in the world's top grower.
July robusta coffee rose $9, or 0.5 percent, to $1,750 a tonne. July raw sugar rose 0.10 cent, or 0.8 percent, to 12.56 cents per lb.
Dealers said the market remained underpinned by labour unrest that threatens to disrupt both the harvest and exports in top producer Brazil. Brazilian oil workers began a 72-hour strike on Wednesday in a new blow to President Temer following a nationwide trucker protest that has strangled Latin America's largest economy for over a week.
Dealers noted that July's discount to October had narrowed recently to about 0.22 cent from 0.3 cent, boosted by a potential tightening in short-term supplies linked to the truckers' protests.
August white sugar was up $0.20, or 0.1 percent, at $350.30 per tonne.
The Iranian state purchasing agency, the Government Trading Corporation of Iran (GTC), has issued a new international tender to buy 60,000 tonnes of raw cane sugar, European traders said on Wednesday.
July London cocoa was down 2 pounds, or 0.1 percent, at 1,813 pounds a tonne, with the market holding well below the May 17 peak of 1,933 pounds. "We now believe London cocoa prices will consolidate over the short term as multi-year resistance around 1,975 pounds a tonne holds and the market prices in more positive fundamentals," BMI Research said in a market note.
BMI Research noted "excellent grindings data globally" would preclude a significant move lower. July New York cocoa rose $10, or 0.4 percent, to$2,507 a tonne.