December 13, 2013
Liffe robusta coffee prices rose on Thursday to match the 3-1/2 month high hit earlier this week as dealers expect another drawdown of exchange-certified stocks, while ICE raw sugar slipped to the lowest in more than three months. Cocoa futures climbed toward a more than two-year high, supported by expectations of an abrupt end to top grower Ivory Coast’s main crop in the coming weeks.
Liffe March robusta coffee were up $31, or 1.8 percent, at $1,778 a tonne by 12:18 pm EST (1718 GMT), having earlier matched the 3-1/2-month high of $1,803 hit on Tuesday. The market remained in backwardation, with the nearby contracts more expensive than deferreds, implying limited availability of coffee in the short term. The January/March spread widened to a $48 January premium, up from $43 on Wednesday but below $56 on Tuesday, which was the widest since January.
The March contract is showing technical strength having risen above its 100-day moving average earlier this week and heading toward the 200-day level at $1,846. It has also climbed above the 61.8 percent Fibonacci retracement level at $1,770, from the July peak.
Dealers said that shrinking certified robusta stocks were supporting the market as firm differentials on the physical market have encouraged roasters and traders to use exchange coffee stored in European warehouses in recent months, rather than shipping from origin.
“Vietnamese farmers have been holding back beans from the market as the harvest nears its end in an effort to push up prices,” said Edward George, head of soft commodities research at Ecobank.
March arabica futures on ICE rose 1.7 cents, or 1.6 percent, to $1.1140 per lb.
In sugar, ICE March futures fell 0.17 cent, or 1.1 percent, to 16.34 cents a lb, just above the session low at 16.32 cents, the lowest since August 30.
Dealers said technicals based on long-term price charts indicated that the market is vulnerable to further losses. “The next major level is 15.93. On a technical basis the market looks poor,” a London-based broker said.
March white sugar on Liffe was down $4.10, or by 0.9 percent, at $445.00 per tonne.
ICE March cocoa settled up $32, or 1.2 percent, at $2,787 a tonne, nearing a more than two-year high of $2,844 hit last week, as arrivals at Ivory Coast ports were expected to tail off sharply in January.
March cocoa on Liffe closed up 35 pounds, or 2 percent, at 1,769 pounds a tonne. Dealers expected a large delivery against the December contract.