London coffee, cocoa and sugar all rallied on Friday, reflecting investors' renewed appetite for commodities that sent oil prices to new all-time highs. London November robustas closed up $12 at $2,109 a tonne, bringing the premium over January down nearer to below $300, as the squeeze on nearby supply looked to have eased somewhat, at least for now.
Benchmark January finished up $38 at $1,825 with positions further out posting similar gains. Total volume was good at above 20,000 lots. The squeeze has been linked to the upcoming crop in the world's biggest robusta producer, Vietnam, where late rains at the end of the wet season have delayed the harvest start in the Central Highlands coffee belt and raised fears about quality. Cocoa prices also managed to shrug off their recent torpor and rise around 2 percent, with the New York market leading the way in afternoon trade.
"All markets are moving up in sympathy," one dealer said. December futures closed up 19 pounds lower at 941 pounds, while March was 20 pounds higher at 959 pounds. "The (soft) dollar gave a very good (buying) opportunity," a London dealer said. Another trader said, "Cocoa is being energetically hedged. There is a lot of two-way business."
Demand for cocoa beans and butter was brisk this week, but traders spoke on Friday that of growing concerns over quality of West African new crop supplies due to incidence of black pod disease. "Quality depends on the weather. If it gets sunny, if it rains less, then it might be to the good (quality)," one said.
London sugar futures also closed firm, although well off earlier highs. With many traders away this week for an industry dinner in Brazil, business remained subdued. Front month December closed up $2.40 at $283.00 a tonne with high oil prices lending support, dealers said.
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