June 28, 2019 / 11:44 AM / 3 months ago

SOFTS-Arabica coffee climbs to 5-month high, sugar also rises

LONDON, June 28 (Reuters) - Arabica coffee futures on ICE rose to a five-month high on Friday supported partly by concerns that a forecast drop in temperatures late next week in Brazil could pose a threat to crops in the world’s top producer.

COFFEE

* September arabica coffee rose 2.80 cents, or 2.6%, to $1.0950 per lb by 1119 GMT, after rising to a five-month peak of $1.0975.

* Dealers said the recent strength of Brazil’s real currency and a more constructive technical outlook following the market’s improved performance had also contributed to the rally.

* “I think the market is still looking towards next Friday and some frost risk and the (strong) real is certainly helping,” one dealer said.

* A stronger Brazil real makes dollar-denominated prices less attractive in local currency terms and can curb producer selling.

* A report by crop forecaster Maxar on Thursday said “near freezing temperatures could reach Parana in the 6-10 day period, but model discrepancies keep frost risk low at this time.”

* Dealers said weekly CFTC data, to be issued later on Friday, should show a reduction in the speculative net short position in arabica coffee to around 35,000 lots, from 40,168 lots a week earlier.

* September robusta coffee rose $28, or 2.0%, to $1,458 a tonne.

SUGAR

* July raw sugar, which expires later on Friday, was up 0.07 cents, or 0.6%, at 12.60 cents per lb.

* Dealers said the sharp fall in July’s open interest reported on Thursday indicated the amount of sugar tendered against the contract may be smaller than previously expected.

* The delivery could, however, still be close to a record level for a July contract at about 1.5 million tonnes although the outlook could change significantly in the run-up to expiry.

* The prospect of a large delivery has been weighing on prices as it could indicate there was a lot of sugar which had struggled to find a buyer in the physical market.

* Weak monsoon rains in India continued to provide support for prices, potentially curbing production in the world’s top sugar consumer.

* August white sugar rose $2.70, or 0.8%, to $331.40 per tonne.

COCOA

* September New York cocoa rose $13, or 0.5%, to $2,466 per tonne.

* September London cocoa was up 11 pounds, or 0.6 percent, at 1,832 pounds a tonne. (Reporting by Nigel Hunt, editing by Louise Heavens)

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