Coffee prices fall on weak real, crop-friendly weather in Brazil

Arabica coffee was down 1.30 cents, or 1.4%, to 93.15 cents per lb at 1310 GMT. Raw sugar was down 0.16 cent,
16 Oct, 2019
  • Arabica coffee was down 1.30 cents, or 1.4%, to 93.15 cents per lb at 1310 GMT.
  • Raw sugar was down 0.16 cent, or 1.3%, at 12.43 cents per lb.
  • New York cocoa fell $30, or 1.1%, to $2,492 a tonne.

Sugar and cocoa also fell.

COFFEE

December arabica coffee was down 1.30 cents, or 1.4%, to 93.15 cents per lb at 1310 GMT, having hit a contract low of 92.20 cents on Friday.

January robusta coffee was down $36, or 2.9%, at $1,228 a tonne, having hit a contract low of $1,211.

The Brazilian real steadied after a sharp drop Tuesday, when it headed back towards September's one-year lows.

A weak real encourages producer selling of dollar-priced commodities such as coffee and sugar.

The prospect of a large coffee crop in top producer Brazil next season also remains a bearish influence.

"The real is very weak... (and) the flowering in Brazil has been very uniform. The weather looks nice in Brazil at the moment," said Carlos Mera, senior analyst at Rabobank.

He added, however: "Central America looks a bit too wet, the harvest there is going to be delayed and if this continues, we're going to see a larger drop in certified arabica stocks," he said.

SUGAR

March raw sugar was down 0.16 cent, or 1.3%, at 12.43 cents per lb.

After gaining 3.5% last month, sugar's upward momentum has stalled as producers sell into any attempted rally.

Still, funds are heavily net short and primed for a short covering rally, especially given forecasts for a sugar market deficit this year.

"13 cents seems difficult to breach. To reach this level, a further contraction of the global balance sheet will be necessary, and this may take a few more months," said Agritel in a note.

December white sugar was down $3.20, or 1%, at $344.40 a tonne.

COCOA

December New York cocoa fell $30, or 1.1%, to $2,492 a tonne.

The market has steadied somewhat after climbing sharply this month, setting a three-month peak of $2,558 on Friday.

Port arrivals in top producer Ivory Coast rose 28% between Oct. 1-13, but against that, there are worries over excessive rainfall.

Europe's third-quarter cocoa grind, a measure of demand, fell 0.1% from the same period last year to 362,940 tonnes.

Germany's third-quarter 2019 cocoa grind fell 2.7% on the year to 103,332 tonnes.

New York December cocoa may break technical resistance at $2,546 per tonne, and rise to the July 8 high of $2,606.

March London cocoa was down 19 pounds, or 1%, at 1,868 pounds a tonne.

Read Comments