ICE arabica coffee futures retreated on Friday after hitting a one-year high in the previous session on heavy short-covering by funds amid signs of tightening supplies.
March arabica coffee fell 1.3 cents, or 1.2%, to$1.1485 per lb by 1446 GMT, having hit its highest level since last November at $1.1680 on Thursday.
Arabica supplies are tightening from recent record high levels, with a global deficit forecast for the 2019/20 season, an off-year in top producer Brazil's biennial crop cycle.
Certified arabica stocks on ICE futures US are at their lowest in nearly a year and a half, having fallen sharply in the past few days.
"The market is having a bit of a collective penny drop moment, ICE stocks have drawn down for eight months. The market is even ignoring weakness in the (Brazilian) real. We could be looking at $1.25 for March arabica," one dealer said.
A weak real usually encourages producers to sell dollar-priced coffee because it raises returns in local currency terms.
January robusta coffee fell $9, or 0.6%, to $1,393 a tonne.
Domestic coffee prices in Vietnam, the world's top robusta producer, fell slightly this week, with traders saying that 2019/20 output would be similar to the previous season.
March raw sugar rose 0.16 cents, or 1.3%, to 12.77 cents per lb, having settled 1.1% down in the previous session.
Sugar remains stuck within recent ranges as falling output in the 2019/20 year is offset by producer selling of excess global stocks built up over the past few years.
March white sugar rose $4.80, or 1.4%, to $339 a tonne.
Security forces reopened the entrance to Iraq's main Gulf port, which receives the bulk of the country's imports of sugar, grains and vegetable oils.
March New York cocoa was down $17, or 0.6%, at $2,625 a tonne, having hit $2,694 on Monday, the highest since May 2018.
New York March cocoa could retest a resistance at $2,683 a tonne, technical signals indicate.
Cocoa prices have been boosted of late by a strengthening in nearby premiums in both New York and London cocoa, indicating tight nearby supply.
The outlook for production in top grower Ivory Coast remains favourable, however.
March London cocoa was down 4 pounds, or 0.2%, at 1,918 pounds a tonne, having hit a 1-1/2 year high last week.
Comments
Comments are closed for this article.