LONDON: Arabica coffee futures on ICE climbed on Wednesday, boosted by technically-inspired buying on the part of speculators, while London cocoa slipped and raw sugar consolidated following sharp gains a day earlier.
COFFEE
March arabica coffee was up 1.40 cent, or 1.1 percent, at $1.2540 per lb by 1438 GMT, after hitting a session high of $1.2550.
Dealers said a bout of early buying had lifted the market above Tuesday’s highs, which improved the technical outlook and inspired more chart-based speculative buying.
“It looks positive at the moment. But the funds are still holding a sizeable short position,” said one dealer. “So if the funds want to keep the market down, they will keep it down.”
Dealers noted the market was vulnerable to short-covering after data recently showed speculators had extended their net short position to a record.
In top grower Brazil, rains in December have helped the development the 2018/19 arabica coffee crop in all producing regions surveyed by research centre Cepea, following dry weather in certain areas.
March robusta coffee rose $1, or 0.1 percent, to$1,714 a tonne.
COCOA
March London cocoa fell 3 pounds, or 0.2 percent, to 1,407 pounds a tonne, with a firmer British pound weighing.
Focus remained on ample global supplies, as favourable weather in top grower Ivory Coast has recently boosted expectations for good crop development.
Cocoa exporters in Cameroon estimated port arrivals since the start of the season in August were down about 20 percent from the same period season.
March New York cocoa rose $7, or 0.4 percent, to $1,919 a tonne.
SUGAR
March raw sugar was unchanged at 14.41 cents per lb.
The market rallied 4.7 percent on Tuesday, lifted by short-covering after data recently showed speculators had dramatically increased their bearish stance.
Dealers said the market was also expecting a wave of buying by index funds, which added support.
“Talk of a large re-weighting program to come by the Index Funds, where they are scheduled to buy some 60K lots to make up for the [year’s] drop in prices, has stopped the market from falling further and encouraged short covering,” Nick Penney, senior trader at Sucden Financial, said in a note.
Indian sugar mills are set to more than double the supply of ethanol to fuel retailers for blending with gasoline in 2017/18, an industry body said on Wednesday.
March white sugar fell $0.10, or 0.03 percent, to$377.10 a tonne.
Source: Brecorder.com
