Arabica coffee is "the most undervalued" member of the soft commodities complex, Rabobank said, forecasting a decline in prices of robusta coffee, and downgrading forecasts for cocoa, cotton and sugar futures.

The bank raised its hopes for robusta coffee, the type traded in London, noting the tighter-than-expected supplies of the bean which lifted futures- briefly – to an eight-month high of $2,190 a tonne on Monday.

However, even the raised price outlook foresees a slight decline in robusta values ahead.

Robusta supplies from exporters other than Vietnam, the top grower, shows shipments are tailing off, "will limit prices to the upside", Rabobank said.

Arabica coffee, the type traded in New York, looks set to regain prominence – if not potentially for some months during pressure from the Brazilian harvest, and while users work through hefty inventories.

'Strong into the autumn'

"We anticipate prices to be rangebound to October, between 170-185 cents a pound," Rabobank said.

However, "buying support is expected to be strong into the autumn", as buyers prepare for the 2013-14 crop year, which will be an "off" year in Brazil's cycle of higher and lower producing seasons.

"Our medium-term fundamental outlook suggests that arabica prices are likely near the bottom of their range, with buying expected in the next quarter."

'Outlook remains bearish'

The comments came as Rabobank lowered its forecast for cocoa futures, if still seeing price rises ahead as output in Ivory Coast, the top producing county, suffers from the end of La Nina weather conditions, which promote yields.

The bank also cut its forecasts for New York raw sugar futures, citing world production surpluses it estimated at 8.1m tonnes in 2011-12 and 4.6m tonnes 2012-13, higher than figures from many other commentators, including the International Sugar Organization.

"Demand for sugar has improved due to weakening international prices, but not enough relative to the expected surplus."

The forecast for cotton futures such that a return to 70.0 cents a pound early in 2013, a level not seen since February 2010.

"The fundamental outlook remains bearish," Rabobank said.