Arabica coffee falls to 13-year low on surplus supplies
NEW YORK/LONDON: Arabica coffee futures on ICE fell to a more than 13-year low on Tuesday with the prospect of a large crop in Brazil adding to concerns about oversupply, while New York cocoa hit a 2-1/2-month high.
COFFEE
May arabica coffee settled down 0.45 cent, or 0.5 percent, at 91.65 cents per lb after dipping to 91.25 cents, the lowest since December 2005.
"Unfortunately, there is nothing bullish about coffee," and prices could soon dip into the 80s, said one U.S. trader.
Arabica prices have plunged more than 10 percent so far this year and speculators are extending their net short positions against the backdrop of excess supplies.
"The specs just seem to hammer it every day relentlessly," one dealer said, adding that Brazil would start to harvest a large arabica crop next month even though it is an off-year in its biennial crop cycle.
May robusta coffee settled down $5, or about 0.4 percent, at $1,413 per tonne after dipping to a low of $1,395, the weakest for the front month since March 2016.
The harvest of Brazil's robusta crop, known as conilons, was about to start and could hit a record high of around 20 million bags, dealers said.
COCOA
May New York cocoa settled up $29, or 1.3 percent, at $2,356 per tonne, and peaked at $2,373, the highest since Jan. 14.
The market was supported by short covering against the backdrop of concerns that dry weather could reduce the size of the mid-crop in top grower Ivory Coast, dealers said.
This was the front month's fourth consecutive finish above the 200-day moving average, a bullish signal, dealers noted.
May London cocoa settled up 21 pounds, or 1.2 percent, at 1,770 pounds per tonne, its ninth consecutive positive finish.
SUGAR
May raw sugar settled down 0.01 cent, or 0.1 percent, at 12.66 cents per lb after touching a nearly two-week high of 12.77 cents.
The market was underpinned by continued strength in oil prices, which hit a 2019 high on Tuesday. Higher oil prices can boost the incentive for mills in Brazil to use cane to make ethanol rather than sugar.
Brazil's March sugar exports were the smallest for the month since 2012, due in part to increased ethanol production.
May white sugar settled up 10 cents, or 0.03 percent, at $339.20 per tonne.
Tereos expects sugar output in the European Union to rise marginally in 2019/20 to 17.3 million tonnes from the previous season's 17.1 million tonnes, the company's executive vice-president said.