Arabica coffee futures settled up more than 2 percent on Monday, on short-covering and position rolling in heavy volume. US cocoa also saw a firm close on short-covering and a lift from the strong pound, while sugar eased in thin dealings as many investors sat on the sidelines.
Key October raw sugar futures dropped 0.36 cent to settle at 27.48 cents a lb. Market adrift in see-saw trade, said brokers. "There's no news to inspire sugar," said Alex Oliveira, senior sugar analyst at brokerage Newedge USA. Market fundamentals seen as constructive given smaller Brazilian sugar crop.
Traders said though that reduced estimates of Brazil's sugar harvest already in the market along with news of exports by India. Open interest up slightly to 587,641 lots as of August 12, against the August 11 open interest of 586,922 lots which is the lowest level since May 24, ICE Futures US exchange data showed.
December arabica coffee futures jumped 5.55 cents, or 2.3 percent, to close at $2.4940 per lb. Market rallied on short-covering, said traders. December saw strong resistance just above the 200-day moving average around $2.5175, said traders. ICE certified arabica stocks fell 1,690 bags to 1,494,893 bags on August 12, around 11-1/2-year lows. There were a light 3,800 bags pending grading, according to ICE data. A cold high-pressure system is expected to move into Brazil later on the upcoming weekend. It expected to remain well south of the country's coffee belt but will bear watching, said forecaster Telvent DTN.
Key December rose $24 to finish at $2,931 a tonne. December closed the week down 2.3 percent. Total volume around 13,254 lots, the lowest since July 21, according to preliminary Thomson Reuters data. Market got a lift on short-covering, said traders. Light September/December position rolling continued ahead of the September contract's first notice day Thursday, said traders. September closed at a $29 discount to December, compared with $28 the previous day.
Market still viewed as bearish technically after the 26-day and 40-day moving averages crossed above the market around $3,060 late last week, and as plentiful supplies pressured the nearby contracts. Total open interest at 165,961 lots on August 12, the lowest since June 30, according to ICE data.
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