Arabica coffee futures on ICE slipped to a five-week low on Monday, weighed down by the widening December/March spread, while raw sugar extended its losses to a three-week low at the start of London Sugar Week amid ample global supplies.
Cocoa futures eased ahead of European third-quarter grind data, a measure of demand, set for release on Tuesday and widely expected to be sharply lower.
The Thomson Reuters/Jefferies CRB index, a global benchmark for commodities, dropped about 1 percent to the lowest in nearly three weeks as weak demand pressured large markets such as oil and copper lower.
Arabica coffee futures came under pressure from big supplies, as did the December/March spread, which widened to around 4.5 cents per lb — the spot contract’s biggest discount to the second position in nearly 11 months.
December arabica coffee futures on ICE settled down 0.85 cent, or 0.5 percent, at $1.6085 per lb. It had touched $1.5950, the lowest level for the front month since Sept. 6.
«The roasters have not been buying much — they seem to be quite well covered,» said Kona Haque, soft commodities analyst with Macquarie Bank.
«The Brazilian producers haven’t been selling much either. The big stocks are Colombians and Central Americans coming onto the board.»
Last week, ICE Futures US announced amendments to its age penalties on certified beans, accelerating the penalty to stock older than 720 days.
«Fresh coffee will not be affected but old coffee will be,» a dealer in New York said.
«It basically makes the cost of stopping coffee in December very expensive because if you were to redeliver against March, you would be penalized at a significant cost as a result of the age penalties.»
By the end of September, roughly 745,000 bags, or 35 percent, of the certified stock had been certified more than 720 days prior, ICE data showed.
November robusta coffee closed down $16, or 0.8 percent, at $2,036 a tonne.
Vietnam’s September coffee exports plunged 31.4 percent from a month earlier to 70,400 tonnes, or 1.18 million bags, Vietnam Customs said, down from a previous government estimate of 75,000 tonnes.
ICE March raw sugar futures closed down 0.20 cent, or 1 percent, at 19.85 cents a lb, after touching a three-week low of 19.81 cents. The loss marked a fourth straight weak session.
«For now, after such a severe drop over the previous four trading sessions, I would expect to see a period of consolidation,» a London-based sugar futures broker said.
Speculators turned net long in raw sugar contracts on ICE Futures US in the week to Oct. 9, setting the biggest such position in nearly two months as the futures market rose to a two-month high, regulatory data showed on Friday.
December white sugar on Liffe eased $3.50, or 0.6 percent, to end at $554.30 per tonne, falling for the fourth straight day.
Dealings were light, with many participants away from their desks this week as London Sugar Week brings together several hundred traders for industry events culminating in the London sugar trade dinner in the Guildhall on Thursday.
«Much talk is likely to center around the production stats from here on in over this week at the various cocktail parties,» said Nick Penney of brokerage Sucden Financial.
«The market is still needing to digest a potential surplus of production despite weather risks.»
Source: brecorder.com/markets/commodities/america/86054-arabica-coffee-eases-to-5-week-low-glut-weighs-on-sugar-.html
Arabica coffee eases to 5-week low, glut weighs on sugar
