Arabica coffee prices fell to a six-week low on Thursday as ample supplies kept the market under pressure and caused a continued build-up in exchange stocks, while cocoa was firmer and sugar slid.
Dealers said the technical outlook for arabica coffee futures deteriorated after the market broke below support.
Benchmark December futures closed 2.90 cents, or 1.8 percent, lower at $1.5860 per lb. The contract hit $1.5715 earlier in the session, the lowest level for the front month since Sept. 6.
«It’s broken down below the $1.5950 level, so it’s a technical move,» said a London-based broker.
This year’s on-year crop in top producer Brazil’s biennial cycle has meant the market is well supplied with arabica beans, with traders estimating a crop of around 55 million 60-kg bags.
«Arabica demand has been growing but not as much as robusta,» said Andrea Thompson, analyst at CoffeeNetwork, part of INTL FCStone.
«You’re still looking at a 5-6 million (60 kg) bag surplus in 2012/13.»
January robusta coffee futures finished $10, or 0.5 percent, lower at $2,048 a tonne.
Thompson said the current crop at top robusta grower Vietnam was not expected to exceed last year’s record.
«After a bumper crop, trees need to recover from producing the bigger crop.»
Earlier this month, CoffeeNetwork forecast Vietnam’s 2012/13 output at 24 million bags, down from 26.5 million bags the previous year.
UNDERVALUED COCOA
Cocoa futures rose ahead of the North American third-quarter grind data, due for publication at around 2000 GMT, with dealers estimating a fall ranging from 3 percent to 10 percent.
The market has been begun to recover after falling more than $300 from peaks set in early September on concern about weak demand and a slight improvement in the outlook for the main crops in West Africa.
«We anticipate funds moving back to net buyers in the market as cocoa prices look undervalued relative to the risk of the coming harvest season,» Rabobank said in a market note.
«If early West African arrival data suggests lower-than-expected crops or lack of farmer selling, it will likely act as the bullish catalyst to bring funds back in,» the report added.
ICE December cocoa futures settled $53, or 2.2 percent, higher at $2,438 per tonne, while Liffe March ended up 34 pounds, or 2.2 percent, at 1,569 pounds per tonne.
Sugar futures were lower, under pressure from continued producer price fixing in Brazil into any signs of a rally.
«Looking further forward than today, it seems the market sentiment is negative, and in the medium term we expect lower levels,» said Thomas Kujawa of brokerage Sucden Financial.
March sugar futures closed 0.32 cent, or 1.6 percent, lower at 19.79 cents a lb.
ICE Futures US said on Thursday that raw sugar futures and options will open at 0230 New York time (0730 GMT), one hour later than at present, effective on Nov. 5.
The announcement came after some market participants had complained that not much business was being done during the two-hour extension to the trading day implemented in January.
December white sugar on Liffe settled $14.30, or 2.6 percent, lower at $541.00 per tonne.
Consultant Jonathan Kingsman said that the consensus view among participants at London Sugar Week was for a rise in cane output in center-south Brazil to 575 million tonnes in 2013/14.
Source: www.brecorder.com/markets/commodities/europe/86797-ice-coffee-sinks-to-6-week-low-cocoa-rebounds-.html