London cocoa futures finished slightly down on Friday as the market sought to consolidate after a sharp rise this week to a 4-month high, dealers said. Robusta coffee futures ended higher on speculative buying as the market continued to claw back losses established early this week while white sugar closed little changed.
Dealers said fund buying had driven the rise in cocoa prices and the market appeared to have the potential to climb further. "It looks like the funds still have an appetite for this market," one dealer said.
March cocoa ended down 4 pounds at 1,034 pounds a tonne. Dealers said support was seen at 1,019 pounds, a key resistance level, which was breached on Tuesday. "I think we have got a bull market but bull markets are littered with retracements," another cocoa dealer said. "Technically cocoa looks to be going higher.
Volume was boosted by rolling forward of positions out of spot December which is due to expire on Wednesday. The open position on the front month fell 6,765 lots to still high 49,009 lots, according to data issued by Liffe on Friday.
Dealers said the price rise this week had generated a significant pick-up in demand for cocoa beans and butter in the European physical market. A strong start to Ghana's cocoa season saw purchases in the first four weeks up 57 percent on a year ago, an industry source said on Friday, and the high volumes of beans were causing backlogs at the country's ports.
Robusta coffee futures ended higher as the market continued to rebound from a sharp setback early this week. January ended up $27 at $1,776 a tonne. The contract tumbled to a low of $1,711 on Monday on selling by system funds but ended the week just $27 below the previous week's finish.
Dealers said a large Vietnamese crop should increase supplies but there remained the potential for tightness on January with a large proportion of stocks held by the receiver of November deliveries whose intentions remain unclear.
In the European physical market, trading in robusta coffee was slow with Vietnamese sellers appearing to be under little pressure to sell. White sugar futures finished marginally higher but the market remained range-bound. March ended $0.80 higher at $291.50 with key resistance at $292.50 and support at $287.00.
Brazilian and Indian sugar producers are battling aggressively for market share in the Middle East, and India appears to be gaining the upper hand, largely due to a freight advantage, traders said on Friday.
Comments
Comments are closed.