Arabica coffee corrects after rally

Arabica coffee futures corrected lower on Tuesday after rallying more than 4 percent to a six-week high in the prior session, while sugar steadied and New York cocoa eased pressured by a stronger dollar.

The arabica market failed to attract follow-through buying after the rally on Monday, spurred by a firming Brazilian currency, when the London robusta market remained shut for the long holiday weekend.

“London’s inability to rally is weighing on New York arabicas,” one London-based broker said.

May arabica traded down 2.2 cents, or 1.5 percent, at $1.4400 per lb at 1100 GMT, having risen on Monday to $1.4735, the highest for the spot contract since Feb. 23.

Speculators increased their net short position in arabica futures and options to the biggest since February 2014.

London May robusta coffee futures were up $22 or 1.2 percent to $1,800 per tonne.

Raw sugar futures steadied in light volumes, capped by abundant supplies.

“The fundamental situation hasn’t changed dramatically with rains still expected in the second half of this month possibly hampering harvesting activities in centre-south Brazil,” said Nick Penney, senior trader with Sucden Financial Sugar.

May raw sugar futures on ICE were up 0.01 cent, or 0.1 percent, at 12.55 cents a lb.

May white sugar was down $2.60 or 0.7 percent to $364.70 per tonne.

New York cocoa edged down in light volumes, pressured by the dollar which clawed back gains after softening on Monday due to a weaker-than-expected U.S. jobs report on Friday.

“Arbitrage activity is quiet. The cocoa market is beginning to turn its attention to European grinds (demand) data expected next week,” one London-based broker said.

New York May cocoa futures was down $2, or 0.1 percent, at $2,798 a tonne.

London May cocoa was up 8 pounds or 0.4 percent to 1,947 pounds per tonne.

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