Liffe September robusta coffee ended $90 lower at $2,505 a tonne on Thursday, tracking some of the recent losses in New York after breaking below technical levels. Liffe August white sugar closes $19.30 higher at $683.90 a tonne, supported by strong demand on the physical market.
Liffe September cocoa ended 20 pounds lower at 1,817 pounds a tonne, under downward pressure from the resumption of Ivory Coast exports. Cocoa eased, pressured by a resumption of supplies from top producer Ivory Coast after the end of a violent power struggle following November's disputed presidential election. In sugar, fund buying was the main impetus for the surge. "The funds who sold yesterday are bidding up the market today," said one veteran London-based sugar futures dealer.
Physical white sugar demand before Ramazan in August had helped to drive up white sugar futures prices, which had outperformed raws, dealers said. "The sugar futures market is trying to catch up with the physical market," said James Kirkup, head of sugar brokerage at ABN Amro Markets (UK) Ltd, referring to high premiums for physical refined sugar over futures.
Thai refined sugar has been trading at around $55-60 per tonne over Liffe August futures, while the best offer for Brazilian refined in containers is at $30 over Liffe August, a European broker said. Dealers said support on the ICE July contract was seen at $2.50 per lb and if prices were to break below this level, roasters might be enticed back into the market. Cocoa prices eased, stuck inside their recent range, with the resumption of Ivorian exports weighing.
"Supply-side prospects from West Africa remain positive, dampening prices," Barclays Capital said in a daily commodities report. "In addition to supply looking higher from the Ivory Coast (though cocoa quality here is a concern) and Ghana, cocoa production looks higher in Cameroon as well."
"Certainly cocoa is coming through and differentials are coming off, which are signs things are getting back to normal," a European fund manager said. "The core thing for now is that this is a big crop and there is a big surplus this year," said the fund manager. The contract slid 8.65 cents on Wednesday and saw its lowest settlement since February 11. The International Cocoa Organisation (ICCO) said on Thursday it had raised its forecast for an expected global cocoa surplus in 2010/11 to 187,000 tonnes from 119,000 tonnes previously anticipated.
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