arabica hits 2-1/2-year low then turns up, sugar firm
Marcy Nicholson and Stephen Eisenhammer
New York| Wednesday December 5, 2012 2:56pm ET
Sugar remains range bound, surplus prevents bigger gains
Arabica seen consolidating around current level
Cocoa dealers debate Ivory Coast crop size
lead and paragraph 2, updates closing coffee/sugar prices,
YORK/LONDON, Dec 5 (Reuters) - Arabica coffee futures
on ICE hit a 2-1/2-year low as the market looked for
a bottom on Wednesday, and then turned higher along
with the commodity complex, while cocoa eased on earlier
investor concerns about U.S. budget talks.
sugar on ICE Futures U.S. turned higher in choppy, rangebound
dealings, following the Thomson Reuters-Jefferies CRB
index which also changed direction and firmed up.
stocks also reversed losses in a choppy session after
President Barack Obama said a deal to avert the looming
fiscal cliff was possible within a week. Earlier, Republican
leaders said talks with Obama were deadlocked, which
weighed on many markets.
coffee, we're making a secondary low," said Shawn
Hackett, of Hackett Financial Advisors in Florida.
been testing this 1.50 (cents) area and we're in the
process of the retest."
arabica coffee futures closed up 0.75 cent, or 0.5 percent,
at $1.4910 per lb, after falling to a 2-1/2-year low
dealers noted the large speculative short position which
has built up over recent months and said a short-covering
rally was possible if funds moved to cover the large
don't see any bullish news that could drive the market
on the upside but I think we may have seen the bottom
recently," said Diapason's Latheire, adding he
expected prices to consolidate around current levels.
London-based broker expected the market to move higher
it gets above $1.60 people will start covering, but
you have to remember Brazil has still got to sell some,
which might initially cap any upside," the broker
producer Brazil is heading into an off year in its biennial
crop cycle after harvesting a large crop this year.
agriculture ministry will sidestep a decades-old practice
of buying up beans to bolster prices that have fallen
sharply this year, instead encouraging producers to
hedge more and boost efficiency, its top coffee official
Corp said it plans to increase the number of its cafes
in the Americas by more than 20 percent by opening more
than 3,000 new shops there in the next five years as
it looks to rely on tea and juice as much as coffee.
robusta coffee futures settled up $5 at $1,886 a tonne.
raw sugar futures on ICE turned up a shade, as a lack
of new fundamentals kept the market choppy and indecisive
in a range from 18.66 to 20.03 cents for the past six
raws closed up 0.13 cent, or 0.7 percent, at 19.57 cents
a lb, remaining stuck in its recent trading range of
between 19 and 20 cents per lb.
concerning the sugar market for the moment is not good
so that is keeping the market under pressure. All the
signals we have from big sugar producers and exporters
are quite bearish and we see strong output again this
year," said Romain Lathiere, head of dealing at
Diapason Commodities Management.
white sugar on Liffe rose $2.40, or 0.5 percent, to
finish at $520.50 per tonne.
International Sugar Organization also said world market
prices could remain under pressure until the end of
the current October/September crop cycle, reiterating
in its monthly report it expects a 2012/13 surplus of
6.18 million tonnes.
prices were near slightly lower with dealers noting
the lower-than-expected arrivals in Ivory Coast were
causing some concern over whether the size of the crop
had been overestimated.
a massive argument over the size of the Ivory crop,"
said a London-based broker.
who think the Ivory crop is smaller than expected and
is going to tail off quite quickly are obviously quite
bullish whereas half the industry thinks it's neutral
and there's no real story."
March cocoa futures settled down 8 pounds, or 0.5 percent,
at 1,540 pounds a tonne.
December premium over March <LCC-1=R> narrowed
for much of the session but widened out late in the
session to 48 pounds after closing at 46 pounds the
previous session. The premium grew sharply in the previous
session after a large amount of cocoa failed to achieve
eyed a wide range of estimates for 2012/13 global cocoa
supply and demand, with trade house Olam International
Ltd forecasting a deficit in excess of 150,000 tonnes,
while U.S. agribusiness company Cargill expects cocoa
supply and demand near balanced. 1/8ID: nL5E8MLLEO 3/8
if Ivory Coast's crop is a bit shorter than expected,
supply and demand is going to be balanced," the
futures on ICE finished lower, with March down $24,
or 1 percent, at $2,420 a tonne.