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SOFTS-Raw sugar falls as Brazil currency weakens; arabica coffee dips

CommoditiesAug 10, 2018 19:40
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SOFTS-Raw sugar falls as Brazil currency weakens; arabica coffee dips

(Updates throughout, adds comment, detail)

LONDON, Aug 10 (Reuters) - Raw sugar futures on ICE stumbled on Friday, pressured by a sharp weakening in the Brazilian real currency and souring chart signals, while arabica coffee also fell.

SUGAR

* October raw sugar SBc1 was down 0.21 cent, or 1.9 percent, at 10.63 cents per lb by 1337 GMT, after falling to 10.58 cents.

* Dealers pointed to a weakening in the Brazilian real, which shed a further 1.6 percent on Friday, as a key driver. BRL=

* A weaker real weighs on prices because it encourages producer selling by improving local returns on dollar-traded commodities.

* Uncertainty around Brazil's upcoming elections remained in focus amid worries that a fuel policy favouring gasoline - and eroding the competitiveness of ethanol - could be reinstated by the incoming government.

* "Any change in policy back to support gasoline will encourage more sugar production (rather than ethanol) in an already saturated market," Nick Penney, senior trader at Sucden Financial, said in a market note.

* Dealers also pointed to a more bearish technical picture, after the prior session's attempted rally over key resistance levels faltered before the close.

* Worries about a prolonged bout of dry weather across the European Union and in top grower Brazil were easing, after crop-friendly rains recently.

* Focus also remained on ample supplies from the likes of Thailand and India, which are expected to offset lower production from top grower Brazil.

* October white sugar LSUc1 fell $4.70, or 1.5 percent, to $317 a tonne.

COFFEE

* September arabica coffee KCc1 fell 0.80 cent, or 0.7 percent, to $1.0685 per lb.

* The weaker Brazilian real was firmly in focus, as it inspired more producer hedging, dealers said.

* Prices also continued to be pressured by index funds rolling short positions out of the September contract and into the December position.

* September robusta coffee LRCU8 was down $3 or 0.2 percent at $1,668 a tonne.

* Brazil exported 2.03 million 60-kg bags of green coffee in July compared to 1.59 million bags a year ago, despite some difficulties at ports faced by Brazilian exporters, Cecafé said on Thursday. December New York cocoa CCc2 was down $3, or 0.14 percent, at $2,126 a tonne.

* December London cocoa LCCc2 rose 3 pounds, or 0.2 percent, to 1,607 pounds a tonne, boosted by the weaker British pound. GBP=

* A number of small trading houses are beefing up their cocoa teams, as a wave of high-profile exits left the sector highly concentrated, presenting more physical trading opportunities.

SOFTS-Raw sugar falls as Brazil currency weakens; arabica coffee dips
 

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