Raw sugar and arabica coffee futures on ICE settled higher on Friday as a more upbeat mood in commodity markets inspired fresh fund buying, and a weaker dollar supported for much of the session. New York cocoa prices gained. March raw sugar settled up 0.25 cent, or 1.9 percent, at 13.44 cents per lb., yet nearly 3 percent lower for the week.
Prices increased on broader strength in commodities, dealers said. This inspired renewed speculative buying, dealers said, with funds testing technical resistance levels. Analysts were split on whether unfavorable weather and low prices could curb production in the European Union, India and top grower Brazil in 2018-19.
"I don't think the expected el Nino is likely to develop to such a degree that will have a strong influence. We'll just have to see what the funds are doing," said McKeany-Flavell's Daniel Aviles. December white sugar settled up $5.80, or 1.6 percent, at $357.70 a tonne, more than 3.5 percent lower on the week.
December arabica coffee settled up 2.25 cents, or 1.9 percent, at $1.2005 per lb., also supported by the weaker dollar and little changed from the week prior. Dealers also pointed to follow-through buying after the previous day's dramatic rally, which was driven by speculative short-covering on the back of gains in the Brazilian real.
"From being overbought, we basically corrected the overbought situation and now the funds are covering shorts again," a US trader said. January robusta coffee settled up $17, or 1 percent, at $1,729 per tonne, also barely changed from the week prior.
December New York cocoa settled up $3, or 0.13 percent, to $2,267 a tonne, closing the week up 0.7 percent. Prices were negative for much of the session, then "more speculative buying entered near the close," said Jack Scoville, president of Price Futures Group.
Focus remained on a strong start to the main crop in Ivory Coast, which has boosted expectations for ample supplies. Ivory Coast banks are refusing to finance cocoa bean purchases by some local exporters until they are guaranteed repayment of 160 billion CFA francs ($279 million) of debt from failed export giant SAF-Cacao, sources said. December London cocoa settled down 1 pound, or 0.06 percent, to 1,675 pounds a tonne and ending the week 1.7 percent lower.
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