London robusta coffee and cocoa futures slipped in moderate trading on Wednesday on profit taking and sluggish buying interest capped by a firmer US dollar, dealers said. London white sugar futures seesawed in light, choppy trade in sympathy with oil prices. Many traders were away from their desks for an industry gathering in New York culminating in a dinner later on Wednesday.
The dollar gained as comments from a Federal Reserve official increased expectations that the US central bank's cycle of aggressive interest rate cuts may be nearing an end.
"There's evidence that quite a few people have left commodities markets, basically taking profits," said Lars Steffensen, managing director of commodities investing at Ebullio Capital Management in London.
"We're seeing a pause in the indiscriminate fund buying and things are going to drift until we see if the dollar has really turned a corner," he said. London benchmark July cocoa fell as low as 1,433 pounds at midday in a pullback from Tuesday's short covering and buying rally, and on chart-based selling, traders said.
But the market recovered in late afternoon trade and settled off 8 pounds or 0.5 percent at 1,466 pounds a tonne, helped by arbitrage and the US dollar's firmness against the sterling, they said. Traders rolled May and July contracts, dealers said. May expires next Wednesday.
Dealers referred to talk that an analyst report, which had been expected to be bullish, fell short of trade expectations and this triggered some investor selling. Investor profit taking and a lack of buying interest dragged benchmark July robusta coffee to the lowest level since late-January in choppy trade influenced in part by volatile trade in crude oil, traders said.
July settled down $22 or 1 percent at $2,118 per tonne in slim volume of 7,571 lots. Light investor and industry buying had underpinned the market in early session dealings, traders said. Ivory Coast registered 67,009 tonnes of robusta coffee for export in the 2007/08 season by April 18, down from 76,807 tonnes by the same stage a year earlier, according to BCC data seen by Reuters on Wednesday.
London white sugar futures seesawed with fluctuating crude oil, which posted an intraday record high near $123 a barrel. "Price movements in sugar were dictated by oil, which has been whippy (volatile) today," one white sugar futures trader said.
London August white sugar finished up 20 cents at $335.30 a tonne in low volume of 1,404 lots. The International Sugar Organisation (ISO) in New York on Wednesday projected a deficit in world 2008-09 sugar supply of 1.0 million to 2.0 million tonnes, from a surplus of 7.8 million in 2007-08.
Traders said there was a brief burst of buying after the ISO report. Brazil's centre-south 2008-09 cane crush may fall as much as 10 million tonnes because of unseasonal rains in the region, an official of the Sugar Cane Industry Union said Wednesday. Indonesia's efforts to boost sugar output from domestic plantations and become self-sufficient may falter due to increasing supplies of high-quality refined sugar, a senior industry official said on Wednesday.
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