A weak Brazilian real encourages producer selling of dollar-denominated commodities like coffee and sugar. Coffee lost 0.3% on the week, its fifth consecutive negative weekly finish. Fundamentally, plentiful supplies continue to weigh, with the market struggling to absorb Brazil's record-large crop from last year and anticipating another large crop this year.
Consultancy Safras & Mercado expects Brazil to produce 58.9 million 60 kg bags of coffee this year, not far from the record 62 million bags in 2018 and the largest output on record for an off-year in the biennial coffee production cycle. Still, dealers were keeping a close eye on forecasts for dry, warm weather in the country in the coming weeks, which could negatively impact yields.
November robusta settled down $13, or 1%, at $1,314 per tonne. October raw sugar settled down 0.11 cent, or 1%, at 11.47 cents per lb. On the week, the contract fell 1.5%, its third straight negative weekly finish. Prices have been rangebound in recent sessions, caught between signals of excess near-term supply and forecasts that longer-term the market will swing into deficit.
Mills in Brazil's center-south region have passed the half-way mark in the current sugar season after posting an ethanol-heavy performance similar to the last crop, cane industry group Unica said, adding that further cuts in sugar exports were likely. Meanwhile, fall armyworm, a destructive pest, is continuing to spread north in China, reaching 24 provinces and regions and destroying plant species including sorghum, corn and sugarcane.
October white sugar settled down $1.70, or 0.5%, at $310.40 per tonne. December New York cocoa settled up $8, or 0.4%, at $2,238 per tonne, having touched a five-month low of $2,165 a tonne on Tuesday. The contract rose 1.9% on the week, its first positive weekly finish in six weeks. Prices had been pressured by expectations of plentiful supplies out of West Africa thanks to good weather in the region. December London cocoa settled down 6 pounds, or 0.4%, at 1,717 pounds per tonne.