Liffe January robusta coffee ended $98 higher at $1,840 per tonne after setting a two-year high for the second month of $1,850. Market supported by wet weather in top robusta producer Vietnam and fund buying. Liffe front-month December white sugar ended $12.40 higher at $730.60 per tonne after setting an 8-month peak for the front month of $731.70. Market supported by concerns over tight near-term supplies.
Liffe second-month March cocoa ended 6 pounds higher at 1,889 pounds a tonne. Market waiting for clearer indications on the extent to which black pod is damaging crops in West Africa. Robusta coffee was boosted by a combination of weather concerns in Vietnam, the November options expiry and an influx of fund buying, dealers said.
Dealers monitored the wet weather in Vietnam as a typhoon heading for southern China heightened concerns of weather damaging the crop being harvested. "There is some trepidation about whether or not there's going to be a good drying period and whether or not people are going to be able to harvest very uniformly," Keith Flury from commodity analysts FO Licht said.
The development of a $7 premium on the January contract over March, which closed Tuesday at a $8 discount, triggered nervousness in the market. "People get edgy when they see spreads go to a premium," a London-based broker said. A premium on nearby contract months over distant contract months sometimes precedes a future supply shortage.
Dealers said the futures market could correct lower, or at least consolidate, to attract physical offtake, which had slackened considerably in recent weeks. Julio Maria Borges, analyst with Brazil-based Job Economia, said that he anticipated that high congestion at Brazilian ports, which resulted from low short run global availability of sugar, would ease soon. "I think the supply side on a world-wide basis will be more active in the next year and the Brazilian sugar will come back to a normal supply condition," Borges told.
Comments
Comments are closed.