Liffe's cocoa market settled little changed and near an eight-week low on Tuesday after a quiet session of consolidation, traders said. London's front-month March closed one pound stronger at 845 pounds a tonne after an 841-854 range, which saw the market at its lowest since touching 840 on October 26.
The contract turned over 3,828 lots of the 6,703 total. "The market is well balanced with good liquidity on both sides. There's far less aggressive selling than there has been and scale buying down the board," one floor source said.
May slipped three to 857 pounds and shifted 1,336 lots between 855 and 865. Dealers expect trade to start winding down ahead of the end-year holiday with prices stuck in a range, but many see further volatility next year.
"I'm a little bullish," the first trader said. "There are clearly a lot of risks with uncomfortable stories coming out of origin. Next year should be quite lively."
Origin hedging of the main harvest and fund liquidation have driven prices down from their November highs, which were made on speculation a surge in violence in Ivory Coast signalled the start of another civil war.
COFFEE TWO PERCENT LOWER: London's robusta coffee market ended about two percent lower on Tuesday after failing to repeat a recent high despite new peaks on New York's arabica market, dealers said.
"London's gains have been very limited and it's been dragging its heels in the past few sessions because the fundamentals for robusta are bleaker than for arabica," CoffeeNetwork analyst Andrea Thompson said.
Liffe's most-active March futures contract stalled at an intra-day high of $799 for a second straight session, failing to match Friday's $801 high. It closed at $774 a tonne, down 2.2 percent but off the day's low of $771.
Turnover was 5,707 lots, drawn from a market total of 16,135.
"The question is where does it go from here? Back down to a 700-750 level?...If it goes to 725 there's fear of increased selling," Thompson said.
She said New York was eyeing resistance at 109.30 cents before 111/112, basis March. She saw the 102.50 level as vital for protecting declines back down below 100.
The March arabica contract reached a new contract high of 108.7 cents a lb on Tuesday before slipping as low as 104.90. London's front-month January settled at $735 a tonne, dealing between $731 and $760 on turnover of 4,001 lots.
Traders noted most of the structure weakening, with the March/May discount moving out to $24 and January-March widening to about $40. May ended at $797 after shifting 4,811 lots.
Healthy supply from Vietnam has pared gains London made on the back of surging prices in New York.
SUGAR ENDS WEAKER ON PRODUCER SALES: London sugar futures closed weaker on producer selling in light volumes on Tuesday, dealers said.
March closed down 70 cents at $251 a tonne in volume of 1,137 lots after trading between $249 and $251.2. May settled down 20 cents at $263 in volume of 613 lots after moving between $260 and $262.8.
"We have seen producer sales today, with lots of offers in March above $250. I haven't seen arbitrage or fund activity," one trader said.
The Egyptian public-sector Food Industries Company bought 30,000 tonnes of Brazilian raw sugar at $236 a tonne C&F from Noble for arrival in late January or February, one of the parties said on Tuesday. Food Industries Company made the purchase on behalf of Dakahlia Sugar Company, a refiner in the Nile Delta, said a company official.
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