Coffee, sugar jump as Brazilian real strengthens

NEW YORK/LONDON: Arabica coffee and raw sugar futures on ICE climbed on Friday as the currency of top-grower Brazil strengthened to its firmest against the US dollar in six weeks, discouraging producer selling, dealers said.

COFFEE

* July arabica coffee settled up 2.25 cent, or 2.2%, at $1.046 per lb after peaking at $1.053, the highest since Feb. 7.

* Arabica prices surged 13.9% on the month in their biggest monthly percentage jump in two years. Last month, prices crashed to a 13-1/2-year low of 86.35 cents.

* Prices were lifted by a stronger currency in top-grower Brazil, dealers said. The Brazilian real was at its strongest against the US dollar in six weeks. A firmer real can discourage producer selling of dollar-denominated commodities like coffee and sugar.

* Coffee has also been underpinned in recent sessions by concerns about cold weather and quality issues in top-grower Brazil, dealers said, though some maintained that such concerns were premature.

* Brazil's 2019 coffee crop is seen producing less high-quality beans than the previous season, some industry experts said on Wednesday.

* July robusta coffee settled up $22, or 1.5%, at $1,478 per tonne. The contract gained 6.5% in May, following three straight months of declines.

* End-of-month position squaring was also a supportive factor for coffee and sugar prices, dealers said.

SUGAR

* July raw sugar settled up 0.34 cent, or 2.9%, at 12.10 cents per lb, lifted by a firmer currency in top-grower Brazil.

* Dealers were watching resistance at 12.15 cents, the May 10 high.

* The contract rose 0.9% this month, following two straight months of declines.

* The sugar market has derived some support from general strength in agricultural commodities but the upside remains capped by plentiful stockpiles.

* India, a top sugar producer, is likely to see average monsoon rains this year, which should support agricultural production.

* Brazil's Copersucar, the world's largest sugar merchant, expects global trade flow of the sweetener to reach equilibrium between supply and demand in the second half of 2019, which could lead to a price recovery.

* August white sugar settled up $6.70, or 2.1%, at $330.60 per tonne. Prices gained 6.5% on the month.

COCOA

* July New York cocoa settled down $28, or 1.2%, at $2,400 per tonne.

* The contract has risen 1.4% on the month, its fourth straight month of gains and its longest winning streak in a year, buoyed by strong demand signals.

* July London cocoa settled down 11 pounds, or 0.6%, at 1,785 pounds per tonne, after hitting 1,814 pounds, a two-week high.