Coffee prices on ICE hit their lowest in 1-1/2 months on Monday as the real fell versus the dollar and investors focused on excess supplies, while sugar and cocoa also slid. September arabica coffee was 3.4 cents, or 3.4%, lower at 94.75 cents per lb at 1340 GMT, having hit a low of 94.30. Coffee fell 1.6% last week, with plentiful global supplies continuing to pressure the market.
Speculators hiked their net short position in arabica coffee futures to its largest in five weeks in the week to July 30. "There doesn't seem to be much to support the market. Importantly, through the dollar, we might see further pressure," said a dealer. The real fell versus the dollar, extending last week's sharp decline and tempting Brazilian traders to sell more dollar-priced coffee.
September robusta coffee was down $18, or 1.4%, at $1,294 a tonne. October raw sugar was down 0.3 cents, or 2.7%, at 11.70 cents per lb, having hit a near two week low of 11.69. Prices were pressured by lower oil prices, which fell again following US President Donald Trump's vow last week to impose additional tariffs on Chinese imports.
Lower energy prices discourage Brazilian cane mills from producing biofuel ethanol, instead encouraging them to produce sugar. Sugar traders are also still digesting signs of plentiful near-term supplies. "We've not got anyone hugely bullish out there. Long term probably prices are likely to improve, but for the short term (sugar) doesn't seem to be going anywhere," said a dealer.
Sugar gained 3.7% last week, aided by expectations of reduced future supplies. Analyst Green Pool raised its global sugar deficit forecast for the 2019/20 season to 3.67 million tonnes, raw value, from 1.62 million, citing output reductions in Brazil and India.
Speculators cut their net short position in ICE US sugar by 20,793 contracts to 147,109 contracts in the week to July 30. October white sugar was down $5.8, or 1.8%, at $317.90 a tonne. September London cocoa fell 31 pounds, or 1.7%, to 1,831 pounds a tonne, having hit its lowest in nearly three weeks at 1,828. September New York cocoa fell $31, or 1.3%, to $2,330 a tonne, having hit a two-month low of $2,324.
The contract fell 2.9% last week on improving weather conditions in top grower Ivory Coast. Speculators reduced their net long position in ICE US cocoa by 4,236 lots to 18,855 lots in the week to July 30.
Comments
Comments are closed.