Coffee futures on both ICE and Liffe fell more than 3 percent on Friday after failing to extend gains and heavy selling entered the markets, while raw sugar pared losses after hitting the lowest since September. Cocoa on ICE Futures US edged up near a two-year peak, as expectations of a global deficit continued to support the market.
March arabica coffee futures settled down 3.9 cents, or 3.5 percent, at $1.0750 per lb, moving closer to a five-year low hit earlier this month. Total open interest fell for the sixth straight day on Nov. 21, down 784 lots to 150,479 lots, the lowest since Aug. 30, exchange data showed.
"We've seen several rounds of short-covering ... but that short-covering has dried up and the $1.08 to $1.10 area is an area to sell," said Sterling Smith, futures specialist for Citigroup in Chicago.
The move made arabica the weakest performer for the day on the Thomson Reuters/CoreCommodity CRB Index, a benchmark for commodities made up of 19 markets. Producers in Brazil, the world's biggest coffee producer, became active sellers and pressured prices, dealers said.
"You've still got the overriding fundamentals of oversupply," said Andrea Thompson, an analyst at Coffee Network, part of INTL FCStone.
Liffe January robusta coffee ended down $23, or 1.4 percent, at $1,576 a tonne, sliding back sharply after it hit a five-week high of $1,623 earlier in the day.
"There have been technical resistance and origin resistance around the $1,600 mark," Thompson said.
ICE March raw sugar futures closed down 0.11 cent, or 0.6 percent, at 17.40 cents a lb, having touched the lowest since September at 17.33 cents earlier in the session and on track for its fifth straight weekly loss. Total open interest continued to fall on Nov. 21, dropping by more than 5,000 lots to 801,813 lots, the lowest since Oct. 3, ICE data showed.
"The only bullish factors left to ponder at the moment are weather issues in Brazil towards the tail end of the current crop and the possibility of an increase in the Brazilian domestic gasoline price," Nick Penney, senior trader at Sucden Financial Sugar, said in a daily note.
"We're speaking about a take-off in demand, but it's not really appearing yet we're hearing, however, that a few destinations (China) seem to show more demand than we expected at this time of the year," Fabienne Pointier, an analyst at Platts, said.
March white sugar on Liffe closed down $3.30, or 0.7 percent, at $464.10 per tonne. ICE March cocoa settled up $5, or 0.2 percent, at $2,799 a tonne, having on Tuesday peaked at $2,820, the highest for the second month since September 2011.
March cocoa on Liffe finished down 5 pounds, or 0.3 percent, at 1,765 pounds a tonne, feeling pressure from the firm British pound.
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