January 14, 2019 / 3:18 PM / 6 months ago

SOFTS-Arabica coffee slips on fund selling, weaker Brazil currency

(Recasts, updates throughout, adds comment, detail)

LONDON, Jan 14 (Reuters) - Arabica coffee futures on ICE fell on Monday, pressured by a weaker Brazilian currency and renewed speculative selling, while sugar and cocoa were little changed.


* March arabica coffee was down 1.75 cents, or 1.7 percent, at $1.0210 per lb by 1455 GMT.

* Weighing on prices was a softer Brazilian real. A weaker currency in the top grower boosts local returns on dollar-traded goods like coffee, encouraging producers to hedge their supplies.

* Dealers also said the market was correcting after last week’s run-up to a five-week peak, with speculative selling adding some pressure on Monday.

* “It’s the last day of the index fund buying today and I think it’s had an influence,” said one European dealer, noting sellers were keen to take advantage of the window of opportunity.

* Weakening chart signals also added pressure, after the market failed to hold above the 10-day moving average, dealers said.

* “Technically, it felt like the move up last week probably caused a few people to get more negative about the market,” the dealer said.

* March robusta coffee fell $14, or 0.9 percent, to $1,529 a tonne.

* Coffee is a booming business for Western retailers but the farmers who grow the crop are facing a crisis, with arabica prices at their lowest for nearly 13 years.


* March raw sugar was unchanged at 12.78 cents per lb. Last week, prices had their best weekly performance since early October although dealers said on Monday that the buying had petered out for now.

* “The market consensus is that the system funds have been buying back shorts but are still net short,” Marex Spectron said in a report.

* March white sugar fell $0.50, or 0.1 percent, to $344.40 a tonne, after earlier falling to $341.20.

* Dealers said sentiment was somewhat dampened by signs of weak demand for spot supplies and lacklustre interest in taking delivery of the March contract.

* Indonesia also said it may not import white sugar for household use in 2019 due to sufficient stocks and higher production, as three new sugar mills start operation this year.


* May London cocoa fell 6 pounds, or 0.4 percent, to 1,722 pounds a tonne.

* March New York cocoa fell $10, or 0.4 percent, to $2,346 a tonne.

* Market participants were awaiting European cocoa grind data for the fourth quarter of 2018, due out on Wednesday, for fresh indications of demand. (Reporting by Ana Ionova; Editing by Mark Potter and Susan Fenton)

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