Coffee and Sugar Futures Fall, Cocoa Hits Three-Week High

Coffee and sugar traders had their eyes on New York and London markets Wednesday as key commodity prices shifted—some falling on technical moves and demand concerns, others rising unexpectedly. For coffee drinkers and market watchers, the big question is: why did arabica and sugar drop, while cocoa climbed to a three-week high? The answers lie in contract shifts, weather uncertainty, and shifting trade flows.

In short: ICE arabica coffee futures fell 2.3% to $1.814 per pound due to widespread contract rollover ahead of the U.S. Memorial Day weekend, while cocoa futures rose to a three-week high of $2,981 per ton on technical buying and renewed demand signals—even as sugar futures weakened on sluggish demand.

Why ICE Arabica Coffee Futures Fell

The July ICE arabica coffee contract closed down 4.3 cents (2.3%) at $1.814 per pound. This drop came largely because traders were rolling over positions from the expiring May contract to the July contract, a routine move ahead of the long U.S. Memorial Day weekend. At the same time, there remains some uncertainty about the impact of earlier drought conditions in Brazil—the world’s top coffee producer—on this year’s harvest, though that wasn’t the driver of Wednesday’s move.

Robusta Coffee Also Declined

Over in London, the July Liffe robusta coffee contract also fell, dropping 24 dollars (1.2%) to $2,012 per ton. That decline reflects broader weakness in the coffee market and weaker immediate demand, though not as sharply as seen in arabica.

Sugar Futures Drop on Weak Demand

In the sugar market, the July ICE raw sugar contract slipped 0.14 cents (0.8%) to $17.44 per pound. Earlier in the session, prices touched a one-week low of $17.35 per pound. Volume was solid, but overall demand remained subdued, pushing prices lower. The August Liffe white sugar contract also declined, hitting a one-week low of $471.10 per ton before closing down 4.50 dollars (0.9%) at $473.20 per ton.

Cocoa Futures Climb to Three-Week High

Contrasting the weakness in coffee and sugar, cocoa showed strength. The July ICE cocoa contract rose to a three-week high, settling at $2,981 per ton after gaining 13 dollars (0.4%). Earlier, it touched $2,996 per ton. The London July cocoa contract also rose, gaining 8 pence (0.4%) to $1,865 per ton, briefly hitting a one-month high of $1,872 per ton. Analysts pointed to positive technical signals and renewed signs of demand as supporting the rally.

What Determines Coffee and Commodity Price Moves?

Commodity prices like coffee, cocoa, and sugar are influenced by a mix of factors including weather in producing countries (especially Brazil), seasonal contract rollovers, macro demand trends, currency movements, and technical trading patterns. In this case, the Memorial Day holiday in the U.S. led to heavy contract rollover activity, while cocoa benefited from technical momentum and improved sentiment around demand.

Frequently Asked Questions

Why did ICE arabica coffee futures fall on Wednesday?

ICE arabica coffee futures for July dropped 2.3% to $1.814 per pound mainly because traders were rolling over positions from the May to the July contract ahead of the U.S. Memorial Day weekend. There was also some lingering uncertainty about Brazil’s earlier drought impact on the harvest, but that wasn’t the main reason for the decline.

What happened to robusta coffee prices?

The July Liffe robusta coffee contract fell 1.2% to $2,012 per ton, or 24 dollars, reflecting weaker immediate demand and broader market softness, though not as steep a drop as seen in arabica.

Why did sugar futures decline?

July ICE raw sugar futures fell 0.8% to $17.44 per pound, touching a one-week low of $17.35 per pound, while August Liffe white sugar dropped 0.9% to $473.20 per ton. The declines were due to weak demand and steady selling despite decent trading volume.

What caused cocoa prices to rise?

July ICE cocoa futures rose 0.4% to a three-week high of $2,981 per ton, having hit $2,996 per ton earlier. London cocoa also gained, rising 0.4% to $1,865 per ton. The increase came from positive technical signals and renewed demand hopes, not supply issues.

Does Brazil’s drought affect current coffee prices?

Brazil’s earlier drought may impact future harvests, but it was not the main driver of the May 21 price moves. Wednesday’s decline in arabica was mostly due to contract rollover activity ahead of the Memorial Day weekend.

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