Arabica coffee falls 3pc on broad-based selling

24 Jul, 2017

Cocoa futures closed unchanged after climbing to a five-week high.

COFFEE

September arabica coffee settled down 4 cents, or 2.9 percent, at $1.3255 per lb.

The contract had reached the highest level in more than two months on Friday.

The market fell on chart-based selling on technical resistance, said Shawn Hackett, president of Hackett Financial Advisors in Boca Raton, Florida.

Hackett added that commodity-wide selling pressured coffee as the 19-market Thomson Reuters CoreCommodity Index fell for the third straight session.

One trader said coffee prices were on track to head lower.

"Coffee prices have exceeded their fundamental value," said James Cordier, founder of OptionSellers.com. "The value for coffee later this year will be $1.30, lower than where we are right now."

September robusta coffee settled down $40, or 1.9 percent, at $2,103 per tonne.

COCOA

September New York cocoa settled unchanged at $1,968 per tonne after rising to $1,987, a three-week high.

Early indications that production in top grower Ivory Coast may decline in the 2017/18 season and unrest have helped underpin prices.

Commerzbank said in a note it expects prices to climb in the coming months.

Gendarmes in Ivory Coast fought off an overnight attack on their base north of the main city of Abidjan, a security spokesman said on Saturday.

September London cocoa settled down 7 pounds, or 0.5 percent, at 1,554 pounds per tonne.

SUGAR

October raw sugar ended unchanged at 14.4 cents per lb.

Dealers said the market was consolidating just below Friday's seven-week high of 14.69 cents.

"We were getting massive buy signals in sugar," said Hackett, when prices were trading higher earlier in the session. "They're betting on much higher sugar prices."

The market has derived support from concerns of a cold snap in Brazil.

A frost that hit sugarcane fields in the south of the Brazilian state of Mato Grosso do Sul last week may cause limited damage to the crop, said Roberto Hollanda Filho, president of Biosul, the state's bioenergy producers association, in a phone interview on Thursday.

October white sugar settled down 70 cents, or 0.2 percent, at $393.30 per tonne.

 

Copyright Reuters, 2017

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