London coffee futures closed almost four percent higher on Thursday, boosted by speculative and fund buying. Traders said the market had rallied amid sentiment that prices may have become too cheap after hitting a three-week low earlier this week.
"Many people thought the market was overdone and it did not seem to have much reason to come off on the fundamental basis and the Vietnamese crop is going to be a little late," one trader said.
"All these things suggest that the prices should be a little bit higher. The market has been lacking in confidence and some of the confidence is coming back now," he added.
Liffe's most-active January contract climbed as high as $990 a tonne and ended at $979, up $37 or 3.9 percent on a turnover of 6,747 lots. The spot November position traded 560 lots and ended $38 higher at $966. Overall volume was 9,067 lots. "There is a lot of fund and speculative buying and everyone here is rushing to buy," another traders said. Traders said the market in London was lagging behind New York and should have gone up by at least $40.
SUGAR FLAT: London white sugar futures were flat at midday on Thursday as the market consolidated after its recent drop following the WTO order to the EU last week to limit sugar exports by May 22, traders said.
Front month December was down 90 cents to $282.50 per tonne in volume of 555 lots at 1235 GMT, having moved from $284.50 to $282.50. March was unchanged at $293.00 in volume of 192 lots.
"The market is consolidating after its recent fall," one trader said, referring to the five percent drop in futures after the WTO news. London sugar futures could drop a further $10-15 per tonne, trade sources said this week.
A WTO arbitration panel was asked by major sugar exporters Australia, Brazil and Thailand to decide when the EU would have to implement the WTO's original ruling, issued in 2004.
COCOA LITTLE CHANGED: London cocoa futures closed little changed on Thursday and appeared likely to stay stuck in a range in the near-term, traders said.
"The market has been sideways for months. We are still in a range. The market could move either way when it breaks out of the range," one trader said.
Front month December settled up 1 pound at 815 pounds a tonne in volume of 2,837 lots, having held in a narrow range of 812 to 820. March concluded up 1 pound to 837 pounds in volume of 1,861 lots, after trading from 834 to 841. Total volume was a light 5,683 lots.
Comments
Comments are closed.