London coffee and cocoa rise

London coffee futures rose to their highest in three weeks on Thursday as speculative buyers created fresh momentum in technical trade, while sugar futures languished near 26-month lows, pressured by hefty supply. Speculative activity was also seen in cocoa futures, with the benchmark December position hitting a two-week peak.
Robusta coffee futures gained in brisk volume as speculative buying gathered momentum after technical resistance at $1,790 was breached on the benchmark November position, triggering automatic buy orders, dealers said.
Strength on November helped widen the November-January spread with the former month now at a premium of roughly $50, up from around $33 on Wednesday - raising talk of a possible squeeze. Benchmark November ended up $30 at $1,800 on volume of 79,494 lots, having hit a near three-week high of $1,816 earlier.
"November-January and November is the focus point of attention for the specs - it's got a bit of a head of steam on it. We are seeing muscle flexing from a fund or two," one dealer said. Spec selling kept London white sugar futures under pressure, having hit a 26-month low for the front month on Wednesday. "Technically the market looks like a piece of dirt - the technical picture seems to have taken over. There might be a bit of spot demand holding up the front month position as the October-December spread has tightened but the rest of the board is getting hit," a dealer said.
October ended down 70 cents at $273.00 per tonne, having hit a 26-month low of 270.00 on Wednesday. Sentiment has been weighed by a supply glut caused by bumper crops in Brazil and India. Dealers saw support in October around $240.00-245.00. On the output front, Germany is likely to produce about four million tonnes of white sugar from beet in the current 2007/08 season, up from 3.3 million tonnes in 2006/07, the country's Agriculture Ministry said on Thursday.
London cocoa futures gained, as speculative buying activity offset expectations for a large 2007/08 West African main crop. December ended up 17 pounds at 969 pounds. Brazilian 2007/08 (May/April) cocoa arrivals from Bahia and other states totalled 1.28 million 60-kg bags by September 2, down 26 percent from 1.75 million bags a year ago, Bahia Commercial Association said.