Raw sugar and arabica coffee futures on ICE recovered from multi-week lows on Monday, as a jump in the Brazilian currency attracted some buying. Cocoa futures fell, bucking the firm move in larger markets as the 19-commodity Thomson Reuters CoreCommodity Index jumped to a four-week high. March raw sugar settled up 0.1 cent, or 0.5 percent, at 19.94 cents per lb. It was on track to close lower in November, its second straight month down after the spot contract fell to 19.57 cents last week, its weakest since September 1.
The Brazilian real rose against the US dollar. "It is certainly bringing in some short-covering or unwinding of that currency trade," said one US trader. Funds have been scaling back long positions since late September, driving prices down, but they appeared to have taken a break from selling, traders said.
Dealers said the market would keep a close eye on weekly Commitment of Traders data, set for release at 3:30 pm EST (2030 GMT), to assess how much the fund net long has been reduced. Dealers said the speculative net long position may drop below 200,000 lots for the first time since early May. March white sugar settled up $1.90, or 0.4 percent, at $529.40 per tonne.
In coffee, March arabica futures settled up 1.25 cent, or 0.8 percent, at $1.5665 per lb. Prices rose for the first time in four sessions after falling to $1.542 on Friday, the lowest since October 12. Robusta futures also firmed, reflecting a tighter supply outlook. Marex Spectron on Monday forecast a surplus of 5.8 million bags of arabica coffee largely offset by a deficit of 5.6 million bags of robusta.
"We reiterate our view that the arbitrage needs to tighten, especially given the positioning that currently exists in both markets," Marex said in a report, referring to the current premium of arabica to robusta coffee. January robusta coffee settled up $46, or 2.3 percent, at $2,078 per tonne. Cocoa futures fell, with March London settling down 10 pounds, or 0.5 percent, at 1,975 pounds per tonne, while March New York settled down $13, or 0.5 percent, at $2,402 per tonne. Light rain mixed with sunny spells across most of the Ivory Coast's main cocoa growing regions last week will boost the October-to-March main crop, farmers said on Monday, though some dry seasonal winds were reported to have started early.