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Updates with market action, comments and closing prices
NEW YORK/LONDON, July 12 (Reuters) – Arabica coffee futures on ICE fell sharply to a two-month low on Tuesday, pressured by weakness in the currency of top producer Brazil and the prospect that a global economic downturn could curb consumption.
COFFEE
* September arabica coffee KCc2 settled down 7.9 cents, or 3.7%, at $2.0535 per lb after touching a two-month low of $2.0475.
* Dealers said an increasingly bleak global economic outlook had also prompted speculators to reduce a net long position over the past few days.
* “I see this as mainly a macro driven slide as we see strong outflows across many of the commodity markets,” said a U.S.-based coffee trader.
* The weakness in Brazil’s real currency BRL= has tempted exporters to sell dollar-priced coffee by raising returns in local currency terms.
* September robusta coffee LRCc2 fell $12, or 0.6%, at $1,954 a tonne.
SUGAR
* October raw sugar SBc1 settled down 0.17 cent, or 0.9%, at 18.69 cents per lb with speculators increasingly looking to hold short positions against the backdrop of a gloomy economic outlook.
* Dealers noted the cane crush during the second half of June in the key centre-south region of Brazil was slightly lower than expected.
* The Unica report, however, showed mills allocating a bit more cane to sugar production and also better agricultural yields.
* “With the improvement in mix and ATR (recoverable sugar), as well as the yield, the report offsets the sugar production drop, so the report is neutral,” said a broker.
* August white sugar LSUc1 rose $7.60, or 1.3%, at $578.90 a tonne.
COCOA
* September New York cocoa CCc2 fell $19, or 0.8%, to $2,354 a tonne, with the market kept on the defensive by concerns over a potential weakening of demand linked to global economic woes.
* Dealers said that cocoa grind data for the second quarter should provide an indication on whether demand has already begun to weaken. European grind data is due on Wednesday and the North American grind is scheduled for release on July 21.
* September London cocoa LCCc2 fell 6 pounds, or 0.3%, to 1,754 pounds per tonne.
(Reporting by Marcelo Teixeira and Nigel Hunt; Editing by David Evans, David Goodman and Shailesh Kuber)
((marcelo.teixeira@tr.com; +1 332 220 8062; Reuters Messaging: marcelo.teixeira.thomsonreuters.com@reuters.net – https://twitter.com/tx_marcelo))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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