Coffee hits 1-1/2 month low on excess supplies, weak real; sugar, cocoa slide

05 Aug, 2019

COFFEE

* September arabica coffee was 3.4 cents, or 3.4%, lower at 94.75 cents per lb at 1340 GMT, having hit a low of 94.30.

* Coffee fell 1.6% last week, with plentiful global supplies continuing to pressure the market.

* Speculators hiked their net short position in arabica coffee futures to its largest in five weeks in the week to July 30.

* "There doesn't seem to be much to support the market. Importantly, through the dollar, we might see further pressure," said a dealer.

* The real fell versus the dollar, extending last week's sharp decline and tempting Brazilian traders to sell more dollar-priced coffee.

* September robusta coffee was down $18, or 1.4%, at $1,294 a tonne.

SUGAR

* October raw sugar was down 0.3 cents, or 2.7%, at 11.70 cents per lb, having hit a near two week low of 11.69.

* Prices were pressured by lower oil prices, which fell again following US President Donald Trump's vow last week to impose additional tariffs on Chinese imports.

* Lower energy prices discourage Brazilian cane mills from producing biofuel ethanol, instead encouraging them to produce sugar.

* Sugar traders are also still digesting signs of plentiful near-term supplies.

* "We've not got anyone hugely bullish out there. Long term probably prices are likely to improve, but for the short term (sugar) doesn't seem to be going anywhere," said a dealer.

* Sugar gained 3.7% last week, aided by expectations of reduced future supplies.

* Analyst Green Pool raised its global sugar deficit forecast for the 2019/20 season to 3.67 million tonnes, raw value, from 1.62 million, citing output reductions in Brazil and India.

* Speculators cut their net short position in ICE US sugar by 20,793 contracts to 147,109 contracts in the week to July 30.

* October white sugar was down $5.8, or 1.8%, at $317.90 a tonne.

COCOA

* September London cocoa fell 31 pounds, or 1.7%, to 1,831 pounds a tonne, having hit its lowest in nearly three weeks at 1,828.

* September New York cocoa fell $31, or 1.3%, to $2,330 a tonne, having hit a two-month low of $2,324.

* The contract fell 2.9% last week on improving weather conditions in top grower Ivory Coast.

* Speculators reduced their net long position in ICE US cocoa by 4,236 lots to 18,855 lots in the week to July 30.

Copyright Reuters, 2019

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