Coffee futures eased but remained near 13-year highs on Friday, consolidating recent gains made on fund buying and supply concerns, while raw sugar was softer and traded below its 9-month peaks, underpinned by tight supplies
Coffee futures eased but remained near 13-year highs on Friday, consolidating recent gains made on fund buying and supply concerns, while raw sugar was softer and traded below its 9-month peaks, underpinned by tight supplies.
Cocoa futures were little changed, as dealers watched activity in top grower Ivory Coast in the lead up to elections due later this month.
Dealers said the coffee market had attracted strong fund interest this week as arabica prices rallied to a 13-year high and robustas hit a 2-year high on Thursday.
“The current must-have popularity of agricultural commodities and accompanying fund buying is defying anybody to call a top,” Ralph Hawes at Sucden Financial said.
Dealers said world coffee production may fall short of expectations if key growers including Colombia and Vietnam revise output figures lower.
December arabica coffee broke above the key psychological level of $2,00 a lb on Thursday, peaking at $2,0350 a lb.
ICE December arabica futures (KCc1) traded down 1,20 cent or 0,6% at $1,9980 a lb at 1121 GMT.
Liffe January robusta coffee (LRCc2) was down $15 or 0,8% at $1878 per tonne after setting two-year peak for the benchmark second month of $1910 on Thursday.
Technical indicators based on historic price data show arabica coffee may have further upside yet.
A bullish target at $2,0720 per lb for New York coffee
(KCc2) is unchanged, as per a Fibonacci projection analysis, Reuters analyst Wang Tao said. [ID:nSGE69L03B]
MASSIVE CROP SEEN
“I think the latest leg up in arabicas has been prompted by concerns on robusta,” Barclays Capital analyst Sudakshina Unnikrishnan said, adding domestic robusta prices in Vietnam had risen to high levels.
“Coffee is one market where we are not as positive on a one-year basis than we are in a lot of other (commodity) markets
... We do have a record Brazilian crop in the offing.”
Cocoa was steady with technicals also supporting further gains.
ICE December cocoa (CCc1) was up $8 or 0,3% at $2825 per tonne.
Liffe second-month March cocoa (LCCc2) was up 9 pounds or 0,5% at 1932 pounds a tonne in thin volume of 383 lots.
New York cocoa (CCc1) is expected to rally towards the Oct.
13 high at $2901 per tonne as it is back in the consolidation range between $2715 and $2901, with strong momentum, said Tao. [ID:nSGE69L03Q]
Dealers continued to monitor key producer Ivory Coast’s election build up for any signs of unrest.
“The crop is earlier than last year but it seems there’s been a bit held back, they’re waiting for pre-election hype for a better price,” a European trader said.
Ivory Coast is the world’s number one cocoa producer and cocoa is its largest export.
“It’s very strange that they put the elections right in the middle of the main crop,” another European trader said.
Ivory Coast’s electoral commission insisted on Thursday that Oct. 31 polls would be held on time. [ID:nCOC171039]
ICE raw sugar edged lower, underpinned by tight supplies and reports of Brazilian buy backs from industry.
“There’s a lack of physical buyers. End-destination are not pricing at these levels,” a senior London-based sugar futures dealer said.
ICE March raw sugar futures (SBc1) were down 0,14 cent or 0,5% at 28,21 cents a lb at 1125 GMT.
London December white sugar (LSUc1) was off $15,30 or 2,1% at $708,60 per tonne in light turnover of 1243 lots.
New York sugar (SBc1) could fall towards 26,50 cents per lb as a top may have formed around Thursday’s high at 29,23 cents,
