May 9, 2018 / 11:12 AM / in 8 months

SOFTS-Robusta coffee falls as producer hedging weighs, NY cocoa slips

LONDON, May 9 (Reuters) - Robusta coffee futures on ICE fell further on Wednesday, after a wave of producer hedging halted the market’s recent advance, while New York cocoa and raw sugar prices also slipped.


* July robusta coffee was down $28, or 1.6 percent, at $1,766 a tonne by 1101 GMT, after hitting a session low of $1,758.

* The market last week tapped $1,845, its highest since November 2017, partly supported by dwindling certified stocks.

* However, dealers said the market’s advance above the $1,800 mark had attracted heavy producer hedging on Tuesday, which knocked prices lower and encouraged follow-through selling.

* “It ran into a wall of selling,” one European dealer said. “You had Vietnamese hedging as well as very good Brazilian hedging, which is something new for robusta. And that stopped the rally in its tracks.”

* Dealers also pointed to the Brazilian real as a factor, after it fell sharply to its lowest since June 2016 on Tuesday.

* A weaker real encourages producers to sell dollar-denominated commodities like coffee by improving local currency returns, although it typically impacts Brazil’s larger arabica coffee market.

* “Often the Brazilian real doesn’t really matter for robusta,” the dealer said. “But because there’s a good conillon crop this year and there’s availability, the real does matter this time around.”

* Vietnam exported 32.59 million 60-kg bags of coffee in April, slightly below government estimates but 22.2 percent lower than exports in March.

* July arabica coffee slipped 0.25 cents, or 0.2 percent, to $1.1935 per lb.


* July New York cocoa was down $22, or 0.8 percent, at $2,751 a tonne.

* The market fell sharply in the prior session, pressured by a stronger dollar and chart-inspired speculative selling.

* Prices have rallied sharply since the start of the year, with the advance fuelled by momentum-driven fund buying.

* However, dealers noted the buying spree had taken futures into technically overbought territory, with the market due for a correction.

* July London cocoa was slipped 14 pounds, or 0.7 percent, to 1,920 pounds a tonne.

* China will grant Ghana $35 million to help build a 40,000-tonne state-run cocoa processing plant, said Joseph Aidoo, the head of the cocoa industry regulator Cocobod.


* July raw sugar slipped 0.02 cents, or 0.2 percent, to 11.54 cents per lb.

* August white sugar fell $0.10, or 0.03 percent, to$327.50 a tonne. (Reporting by Ana Ionova Editing by Keith Weir)

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