ICE cocoa futures posted the biggest one-day gain in nearly three months on Wednesday on technical buying, while ICE arabica coffee sank the most in two weeks on selling in top grower Brazil that has pushed global prices to an almost four-year low. ICE raw sugar futures closed down for a sixth straight session, consolidating near a recent almost three-year low.
September cocoa futures on ICE Futures US rose $52, or 2.4 percent, at $2,230 a tonne, the biggest one-day jump since early April. A breach of technical resistance near $2,200 triggered buy stops. "We're seeing a lot of short covering that took off after we hit stops and we're seeing a bit of a currency play," said Jack Scoville, vice president for Price Futures Group in Chicago. Cocoa trading volumes were above average, compared with lighter volumes in other markets ahead of the US Independence Day holiday.
ICE sugar, coffee, cocoa, and orange juice markets will be closed on Thursday for the holiday and resume regular trading hours on Friday. September cocoa futures on Liffe were up a more marginal 24 pounds, or 1.6 percent, to finish at 1,498 pounds a tonne, with dealers saying the push past key resistance at 1,490 pounds enhanced the technical outlook.
ICE September arabica coffee futures sank 2.95 cents, or 2.4 percent, to settle at $1.2140 per lb, the second month's steepest drop since June 20. Prices neared an almost four-year low of $1.1710 per lb and set in late June on expectations of record off-year output in Brazil. The day's loss stemmed coffee's biggest two-day rally in almost two months.
The weakening Brazilian real pressured arabica as it encourages dealers in the world's top grower to sell dollar-traded commodities to buffer against currency losses. Ricardo Santos, a senior coffee trader at Equatorial Traders, said the plan, if approved, could lead to more selling by Brazilian producers and weigh on prices.
Liffe September robusta coffee closed down $14, or 0.8 percent, at $1,810 a tonne amid expectations of a large crop from top grower Vietnam. The country is considering stockpiling of the upcoming 2013/14 crop to support coffee prices. ICE October raw sugar finished down 0.11 cent, or 0.7 percent, at 16.42 cents per lb under pressure from the real, falling for a sixth straight session. The front-month raw sugar contract fell to 16.02 cents a lb last week, the lowest since July 2010, weighed by hefty global supplies, especially in top grower Brazil, and by expectations of another year of surplus.
Expectations of drier weather in Brazil added pressure. Recent rains there have hampered cane crushing. Dealers said the market was also weighed by strong monsoon rains in India, which have boosted crop prospects in the top sugar consumer. August white sugar on Liffe edged up $1.80, or 0.4 percent, to settle at $497.40 a tonne.
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