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SOFTS-Arabica coffee price falls back after scaling to one-month high
March 9, 2016 / 1:35 PM / 2 years ago

SOFTS-Arabica coffee price falls back after scaling to one-month high

* Rabobank puts Brazil coffee crop at 51.8 million bags

* Rains in Brazil could slow early cane crush

By Nigel Hunt

LONDON, March 9 (Reuters) - Arabica coffee futures edged up to a one-month high on Wednesday boosted by technically-driven buying in thin conditions but then fell back to little changed levels.

Dealers said the recent upward move had been driven partly by a strengthening in the currency of top producer Brazil but the market needed some significant bullish news on crops if the run-up were to really gather momentum.

“I don‘t’ think there is any shortage of coffee. We haven’t got that one story that everyone is looking for,” one London dealer said.

May arabica coffee was up a marginal 0.05 cents, or 0.04 percent, at $1.2175 per lb at 1215 GMT after earlier climbing to a one-month high of $1.2240.

Dealers said there would be an increasing focus in coming weeks on the crop in Brazil with production expected to rise overall but a poor conillon, or robusta, crop anticipated.

Brazilian coffee output for 2016/17 is forecast at 51.8 million bags, up 2.6 million year-on-year but below market expectations, Rabobank said on Wednesday after conducting a crop survey.

May robusta coffee was off $1 or 0.1 percent at $1,407 per tonne.

“It was encouraging that we managed to close above $1,400 last night but there hasn’t been any follow through (buying),” one dealer said.

Raw sugar futures were slightly higher boosted partly by concerns that wet weather in top producer Brazil could slow early crushings.

“Weather forecasters expect the next week or so to be unseasonably wet in much of the region. Should these wetter conditions persist there can be delays to the start of the harvest and crush,” analyst Tobin Gorey of Commonwealth Bank of Australia said.

Gorey said, however, the impact on sugar supplies would be limited as the early cane crush generally focussed on ethanol rather than sugar production.

May raw sugar was up 0.05 cents, or 0.3 percent, at 14.91 cents a lb after earlier equalling last week’s peak of 14.93 cents which was the highest level for the contract this calendar year.

Dealers said there was significant resistance around 15 cents a lb on the May contract.

Cocoa futures were little changed as the market waited to see the extent to which recent rains may help West African mid-crop recover after earlier hot, dry conditions.

May New York cocoa was unchanged at $2,970 per tonne while May London cocoa was off 4 pounds or 0.2 percent at 2,188 pounds a tonne. (Editing by Greg Mahlich)

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