The spot contract hit a low of $1.2285 in the previous session, its weakest since June 28. Dealers said the market was supported by short-covering by speculators. "We're not seeing any selling from the farmers," said one dealer. "It's a waiting game to see if the funds can hold or increase their short position, or if the Brazilians can wait for the market to move higher."
Focus stayed on the weather in top grower Brazil where crop-friendly rain has arrived, although it is not yet clear if it will be enough to relieve dryness in the key coffee regions. "Most areas will need to see some consistent rainfall now to keep the potential for a big crop alive as trees need to recover from stress from the production year last year," said Jack Scoville, vice president of Price Futures Group in Chicago.
The global coffee market will see a smaller supply shortfall in 2017/18 than previously expected, partly due to stronger production in Vietnam and Honduras, said Marex Spectron. January robusta coffee settled up $16, or 0.8 percent, at $1,961 per tonne. December London cocoa settled down 13 pounds, or 0.8 percent, at 1,548 pounds per tonne, falling for the fourth straight session.
Prices were pressured by a surge in the British pound after data showed the economy picking up speed. December New York cocoa settled down $5, or 0.2 percent, at $2,079 per tonne. Markets shrugged off farmers' reports of brown rot disease in top grower Ivory Coast.
Ivorian farmers say they are selling cocoa beans below the minimum farm gate price on a lack of buying interest, blamed on reduced lending to exporters. March raw sugar settled down 0.1 cent, or 0.7 percent, at 14.18 cents per lb. Prices consolidated after Tuesday's 3 percent surge fuelled by data showing Brazilian mills reduced sugar output in favour of ethanol. December white sugar settled down 70 cents, or 0.2 percent, at $374.10 per tonne.
Copyright Reuters, 2017