NEW YORK: ICE cocoa futures skidded on Friday to their worst weekly loss since June 2013 over increasing expectations of a supply surplus, as arabica coffee sank on an improved industry outlook for the 2014/15 crop in top grower Brazil.
Raw sugar on ICE Futures US hit a seven-month low on expectations of a large cash delivery against the October contract expiry this month due to excess supplies.
The second-month ICE December cocoa contract hit a more than one-month low of $3,094 and closed down $30, nearly 1 percent, at $3,102 a tonne.
The contract fell 4 percent this week, extending a slide from last week's more than three-year high of $3,300 a tonne on increasing surplus expectations. Speculators have piled into the market on deficit forecasts.
"When you've got a market that's been bullish for as long as we have been in cocoa, it doesn't take much to turn the whole thing around," said Jack Scoville, a vice president with Price Futures Group in Chicago.
Scoville cited an industry group's forecast last Friday for a supply surplus, reversing its earlier call of a deficit. Favorable weather in top grower Ivory Coast and talk that farmers there may still have significant volumes of mid-crop beans to sell added to the pressure. Liffe December cocoa futures ended down 11 pounds, or 0.6 percent, at 1,983 pounds a tonne.
December arabica coffee sank 3.95 cents, or 2 percent, at $1.9850 per lb by 12:45 p.m. EDT (1645 GMT) after Volcafe raised slightly its forecast for Brazil's 2014/15 crop, but said it was the outlook for production in 2015/16 which has bolstered prices.
November robusta coffee futures on Liffe closed down $12, or 0.6 percent, at $2,079 a tonne. Volcafe put 2014/15 Vietnam robusta output at 28.5 million bags, down from the prior season's 30.0 million.
Spot ICE raw sugar futures fell 0.11 cent, or 0.7 percent, at 15.02 cents a lb after hitting a seven-month low of 15.00 cents.
Huge nearby supplies offset expectations of an early end to crushing in top producer Brazil. Sizeable stocks in Thailand and China weighed. Total open interest again hit a one-year high.
It jumped to 910,383 lots on Thursday from 897,272 previously, the most recent ICE data showed.
Traders expect a large cash delivery against the October contract that expires on Sept. 30. The discount of the spot contract to the second-month hit 2.29 cents a lb, the biggest since December 2009, seen as evidence of weak appetite for the sugar.
Liffe October whites slipped $1.80, or 0.4 percent, at $415.80 a tonne after touching $415, a contract low and the front-month's weakest level since January.
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