NEW YORK/LONDON: Coffee futures in New York and London fell during choppy trading on Thursday, pressing closer to last week's multi-year lows as huge global supplies weighed.
Liffe white sugar futures dropped to an over three-year-low because of weak demand, as cocoa futures gained.
Financial markets rallied as the U.S. Federal Reserve indicated it will not soon dial back its loose monetary policy.
The Thomson Reuters/Core Commodity CRB index rose and the U.S. dollar edged up against a basket of global currencies.
The most-active March arabica coffee contract on ICE Futures U.S. closed down 0.3 cent, or 0.3 percent, at $1.0565 per lb after rallying as much as 1.3 percent on short-covering.
Market movement this week has been choppy since the second month touched a nearly five-year low of $1.0415, under pressure from huge global supplies and expectations of another bumper crop in top grower Brazil.
The spot December contract on ICE Futures U.S. was down 0.45 cent, or 0.4 percent, to finish at $1.026 per lb, hovering near last week's seven-year low of $1.0095.
"Any move up in coffee here is a dead-cat bounce," said Nick Gentile, senior partner of commodity trading consultancy Atlantic Capital Advisors.
"The bottom line in coffee is we are oversupplied."
Dealers continued to eye a potential drop to the key psychological and technical support level of $1 per lb.
Liffe January robusta coffee was down $18, or 1.2 percent, at $1,447 a tonne, not far above last week's over three-year low of $1,431.
SUGAR SURPLUS WEIGHS
In New York and London, sugar futures weakened as long liquidation outpaced scale-down trade buying.
Spot white sugar on Liffe finished down $7.50, or 1.6 percent, to $450.00 a tonne, having touched $448.60, a December contract low and the weakest in more than three years.
The white premium traded below the $80 seen as viable for refineries to turn a profit.
The December/March spread has widened as the December contract neared its Friday expiry, taken as a sign of little interest in takers of cash delivery against the contract.
The front month's discount touched as low as $20.70 a tonne, its weakest against the second-month since December 2010.
ICE March raw sugar futures closed down 0.16 cent, or 0.9 percent, at 17.64 cents a lb, continuing its recent slump as it set a fresh six-week low of 17.62 cents.
"I think it's got to a point now where probably the longs, maybe even the funds, have started to liquidate gradually," a London-based broker said.
Brazilian trader Copersucar began loading 30,000 tonnes of bulk sugar on Monday from its fire-damaged terminal in Santos, a shipping agency said.
The news was taken as a sign that concerns over logistics and delivery at the world's busiest sugar port were overdone.
Raw sugar has fallen over 12 percent since it hit a one-year peak above 20 cents on Oct. 18, when worries over the fire drove a wave of short-covering.
The International Sugar Organization raised its forecast for a global surplus of 4.7 million tonnes in the 2013/14 crop year that began on Oct. 1, up from a previous outlook of 4.5 million.
Rising output and expectations of another year of surplus drove front-month prices to three-year lows in July.
ICE March cocoa reversed earlier losses and closed up $15, or 0.6 percent, at $2,680 a tonne as speculators on both sides defended their positions.
Cocoa buyers in top producer Ivory Coast are paying farmers well above a government-guaranteed minimum price to secure beans as demand from worried European traders outstrips supply.
Dips have spurred trade buying after the second-month touched two-year highs of $2,775 per tonne in late October.
March cocoa on Liffe edged up 3 pounds, or 0.2 percent higher, to finish at 1,711 pounds a tonne.
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