SOFTS-Arabica coffee prices fall, New York cocoa also down

NEW YORK, Aug 26 (Reuters) - Arabica coffee futures fell on Tuesday, retreating from the prior session's 3-1/2-month high, with the market technically overbought after its recent rapid rise.

COFFEE

* Arabica coffee futures KCc2 settled down 5.45 cents, or 1.4%, at $3.723 per lb, slipping back after setting a 3-1/2-month high of $3.8710 on Monday.

* "Given the pent-up buying needs of participants — especially roasters — any correction may prove shallow and short-lived," said a U.S.-based trader.

* Dealers said the recent run-up was fuelled partly by a drop in certified exchange stocks as U.S. roasters look for alternative sources of supply after the U.S. government imposed a 50% tariff on imports of Brazilian coffee.

* They also noted rains would be needed in September to improve the outlook for next year's arabica crop in Brazil, which has been impacted by dry weather and cold snaps.

* StoneX on Monday forecast that Brazil's 2025/26 arabica crop would fall 18.4% to 36.5 million 60-kg bags.

* Brazil's conilon (robusta) crop, which is often irrigated, appeared in better shape, dealers added.

* Robusta coffee LRCc2 rose 0.9% to $4,690 a metric ton.

COCOA

* New York cocoa CCc2 ​settled down $411, or 5.1%, to $7,613 a ton, with the market resuming its recent downtrend after a short-lived rebound on Monday.

* Dealers said weak demand continued to weigh on prices.

* "The weakness in prices is likely to be due to demand concerns triggered by weak cocoa grinding figures in Europe, Asia, and North America for the second quarter," Commerzbank said in a note.

"Moreover, U.S. import tariffs on various cocoa-producing countries, ranging from 10 to 15 percent, could further weigh on cocoa demand in the U.S."

* London cocoa LCCc2 was little changed at 5,319 pounds per ton, partly adjusting to gains in New York on Monday when UK-based markets were shut for a public holiday.

* The U.S. has agreed in principle to exempt Indonesian exports of cocoa from the 19% tariff imposed by President Donald Trump since August 7, Indonesia's top trade negotiator said on Tuesday.

SUGAR

* Raw sugar SBc1 was little changed at 16.41 cents per lb.

* Brazil's Conab cut its forecast for sugar production in the 2025/26 season to 44.5 million tons, citing bad weather conditions impacting the cultivation of sugarcane.

* White sugar LSUc1 gained 0.3% to $488.10 a ton.