By Julie Wernau

Coffee futures bounced back Friday following a recovery in the Brazilian real, which was pummeled Thursday amid a widening political scandal in Brazil, the world's largest growing region.

Arabica coffee for July rose 1.9% to end at $1.321 a pound on the ICE Futures U.S. exchange, still down from where the contract had been trading before Thursday's losses.

ED&F Man's Volecafe said Thursday's move in the currency meant coffee was worth 3.6% more to producers in real terms, encouraging sales.

Helping the bulls Friday, Rabobank said it expects a large coffee deficit in the 2017/2018 crop year of 6.8 million bags despite visible stocks of coffee that keep building. The firm said stocks will come down as exports of coffee out of Brazil were down 24% month on month and 13.5% year on year in April.

The firm pegged its projections for a large deficit, following years of shrinking deficits, to increased global demand for coffee and it being an "off" year in Brazil's cycle of alternate higher- and lower-producing years in arabica. The firm based its projections for increased global demand for coffee on increased net imports of coffee in consuming regions over the last two quarters.

"The Brazilian real remains a potentially dominant bearish factor," the firm said.

In other markets, raw sugar for July was up 2.2% to end at 16.38 cents a pound, cocoa for July lost 2.7% to settle at $2,028 a ton, frozen concentrated orange juice for July lost 1% to settle at $1.3975 a pound, and July cotton rose 0.3% to settle at 79.45 cents a pound.

Write to Julie Wernau at julie.wernau@wsj.com

(END) Dow Jones NewswiresMay 19, 2017 15:18 ET (19:18 GMT)

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