London robusta coffee futures closed up more than 4 percent on Monday after soaring to their highest in more than seven years on heavy buying by funds, traders said.
"There is quite a bit of spec buying," one dealer said.
The benchmark November contract closed up $69, or 4.7 percent, at $1,535 a tonne after rising nearly 5 percent to hit a high of $1,541 earlier in the session.
The bottom of the day's range was $1,478 and total volume was a heavy 15,918 lots.
Robusta, which is largely used to make soluble coffee, has risen 26 percent since the start of the year.
The market was last at similar levels at the end of May 1999 and has risen by about 17 percent on a second-month continuation basis since the start of August.
"The market is looking good technically and fundamentally...There is an insatiable demand," the trader added.
Traders cited worries that the coming crop from top robusta grower Vietnam, which is due to start arriving on the market in December, might not be enough to cover the supply shortfall.
The September-November spread showed a premium of $86, while November-January was at $134. At the start of the month November-January was at a premium of about $22.
COCOA DOWN:
London cocoa futures ended down on Monday after falling to a 2-1/2-month low on speculative and arbitrage selling, dealers said on Monday.
The most-active December contract settled down 14 pounds, or 1.6 percent, at 863 pounds after touching the low of 860 pounds earlier in the session.
The day's high was 875 pounds and total volume was a moderate 7,120 lots.
"There was a bit of pressure because of arbitrage selling after the dollar weakened a bit," one dealer said.
The dollar weakened to nearly $1.90 against the pound, after closing at $1.88 on Friday.
Dealers said the arbitrage trading sparked speculative selling, dragging the market down further.
The market last traded at 860 pounds on June 8, before rising nearly 18 percent in five weeks due to a large fund short position and low stocks of tenderable cocoa in Liffe certified warehouses.
SUGAR WEAKENS: London white sugar futures closed weaker on arbitrage selling on Monday, and traders said the price outlook was bearish due to ample supplies.
Front-month October settled down $5.00 or 1.3 percent at $378.00 per tonne, near the bottom of the day's range of $383.90 to $377.00. The market is hovering just above last week's seven-month-low of $375.00. Total volume was a light 3,769 lots.
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