Liffe coffee ended lower in modest volume on Friday, dragged down by speculator selling but roaster buying provided support. "Some of the specs who went long did sell out when the market came off," a dealer said. "But there is industry as a buyer still down underneath and they try to pick up volume all the time."
liffe's benchmark March nudged down $3 to $756 a tonne after turning over 1,948 lots in a $757-743 band.
Most-traded May shed $4 to end at $781 on 2,363 lots. Front-month January slid $8 to close at $726, turning over 19 lots, in a total volume of 5,744.
Overall benchmark futures have banked a gain of $24 since closing at $732 a week ago.
Traders said increased selling ahead of Vietnam's Tet lunar new year festival starting on February 9 might add pressure over the next week, but tighter supplies could provide support.
"In London, we still have an awful lot of producer selling to be seen," another trader said. "But if (New York) prices do hold at these levels, the bigger roasters will start to look to substitute a bit of their arabica for robusta and surely that must bring the price in."
In Brasil, the government has forecast a 17 percent fall in production, essentially arabicas, to between 30.7 million and 33 million 60-kg bags in 2005 due to the downturn in the biennial crop cycle and lack of fertiliser usage.
Continued high New York prices depressed buying by German roasters this week, traders said on Friday.
SUGAR ENDS SLIGHTLY FIRMER: London white sugar futures settled with modest gains on Friday due to trade buying against producer sales, and traders said the outlook is bullish.
liffe March sugar closed up $0.10 at $265.50 a tonne in volume of 3,340 lots, having moved between $266.00 and $262.50.
May ended $0.70 higher at $273.40 a tonne in volume of 2,015 lots, having moved from $273.70 to $270.20.
"We have seen arbitrage selling at a $63 whites-over-raws March-March premium, and the liffe March-May spread is well bid at $7," one trader said.
Another trader spoke of trade buying against producer selling, as well as long liquidations by speculators and book squaring ahead of the weekend.
Traders said the underlying mood of the market remains upbeat.
Raw sugar futures prices can top the psychological mark of 10 cents a lb - a four-year high - in 2005, while Indian demand will be a key driver for both whites and raws, a Reuters poll showed on Friday.
New York Board of Trade raw sugar futures could hit 10 cents - some analysts say by the end of the first quarter - while spot month London white sugar futures could reach $280 a tonne, according to the median of a poll of seven analysts.
Raw sugar forecasts ranged from 7.5 to 12 cents, while whites ranged from $240 to $300 by year-end.
The median raws forecast was a gain of 10.6 percent over end 2004, while whites were set to rise for the second consecutive year, by up to 8 percent in 2005 after a bumper 38 percent last year, those polled said.
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